If the $790 billion trucking industry were a country, it would belong to the G20. Add in the last-mile delivery industry, and you’d be in the G10.
And yet it lacks basic digitization innovations that are taken for granted in major digitized payment industries, such as technology. Truckers lack a cost-effective and efficient way to pay for fuel and other necessities on the road and must wait for paychecks in the mail every two weeks, with many forced to rely on payday loans.
Efficiency, fast and effective payments have emerged among the top three pain points for driver retention, a top priority for the industry.
From A to B plans to change all that, aiming to be the first FinTech payment platform to modernize the broken financial system of the trucking industry.
“We are building the equivalent of Stripe or Square for transportation”, Vignan VelivelaCEO and co-founder of AtoB, told Karen Webster of PYMNTS in an interview.
The two-year-old startup recently announced that it had raised $155 million in Series B funding to do just that. Its blue-chip list of individual and institutional backers includes industry stalwarts Eric Schmidt, former Google CEO and Alphabet CEO; TIME Ventures by Marc Benioff; Founder of AngelList, Naval Ravikant; DoorDash founders Tony Xu and Stanley Tang; Coinbase founder Brian Armstrong; Instacart CEO Fidji Simo; Jack and Max Altman of Altman Capital; and Long Journey Ventures, according to a release.
Also read: Shippers and carriers lose paper in favor of integrated payments, automated documents
Address fuel first
The company’s vision is to create a payment platform for carriers and drivers who deliver financial services from A to Z.
“AtoB’s payment platform offers a suite of innovative products for the fleet community for the first time, including fee-free fleet cards; instant direct deposit payroll; and access to bank accounts and savings tools,” Velivela said.
The initial focus will be fuel in general, the highest cost in the industry. The platform allows drivers to pay for carrier-approved fossil fuels, as well as being scalable to pay for electronic charging stations and other green fuel sources that may emerge as the industry goes green.
The platform’s payroll system uses debit card rails to transmit payments for services rendered by the mile or other unit of cost on what it claims is an instantaneous basis, effectively the same time or day, every day. .
It is important to note that drivers do not have to change their bank account to use the platform.
Expansion potential includes providing services to drivers, such as insurance and working capital.
In essence, AtoB is creating almost a neobank to serve the driver community. The applications go beyond trucking to encompass any commercial driver who needs to refuel a company vehicle. The platform can serve both independent contractors and full-time employees.
Great technology for small businesses
The platform brings high-tech platform capabilities to what is still a cottage industry. According to the company, most of these businesses are small: 92% of all trucking businesses operate six or fewer trucks; 97% operate less than 20 trucks.
And in that trucking industry, both drivers and carriers have to wait to get paid, it all depends on delivery verification. AtoB aims to speed up this process by using data from the system to track drivers’ progress along their route.
“AtoB is working to improve the lives of the operators and drivers that drive the global economy,” Velivela said. “For too long they have been left behind, without the basic financial services that most companies take for granted.”
Also read: Inflation brings truckload concerns as freight demand slows