SA On-Demand Truck Hire Startup Droppa Nets Multi-Million Rand Investment

Droppa, an on-demand startup for trucks and bakkies based in Johannesburg, has secured an investment of several million rand from IDF Capital investor.

Droppa CEO Khathutshelo Mufamadi (pictured above), a former computer engineer who previously worked for Rand Merchant Bank and Standard Bank, founded the startup in 2016.

Mufamadi said the investment, made two weeks ago, was in the form of a convertible note. He would not disclose the amount invested by IDF Capital in the start-up nor by the participation that the investor had taken, but when pressed by Ventureburn, he acknowledged that the amount exceeded 5 million rand.

IDF Capital CEO Polo Leteka was not immediately available for comment.

The web platform and app allows members of the public, and now retailers too, to source trucks and bakkies to deliver goods on their behalf.

Droppa levies a 15% commission on whatever bakkie and truck operators using the platform charge the end customer. Drivers using the platform charge between R300 and R2000 per load, with the charge depending on the size of the load.

About 300 drivers, from the Western Cape and Gauteng (where the startup currently operates), are currently signed up to the platform. In all, drivers have completed over 2000 trips since the platform went live in May last year, Mufamadi said.

Droppa startup
SA On-Demand Truck Hire Startup Droppa Nets Multi-Million Rand Investment

PE, Durban expansion

He said with the current funding injection, Droppa, which currently has 10 permanent staff, plans to expand to more cities across South Africa including Durban in the first quarter of next year and Port Elizabeth in the first half of next year.

Presently cross-province deliveries are arranged on advanced booking only.

Droppa also plans to create a booking management system customised per retail sector.

In the first quarter of this year, Droppa introduced a platform aimed at retailers, warehouses and small business.

This, claims Mufamadi, has cut the turnaround time that retailers delivering goods to clients commonly provide — from the current up to seven working days, to less than 24 hours.

The startup’s clients range from hardware stores, warehouses, furniture stores and fresh produce among others.

Droppa subsequently introduced a Droppa API for developers, which allows e-commerce and online platforms to integrate with Droppa for last-mile deliveries.

Mufamadi said the startup would also use the current investment to expand these two offerings.

He said the startup currently has a partnership with Hyundai which allows drivers who want parts and services to get these at a reduced rate. He said the startup is looking to conclude similar partnerships with other vehicle manufacturers.

Netted R2m from MTN CTO

IDF Capital previously funded Droppa with R950 000 for an eight-per cent stake when the startup underwent acceleration in late 2017 to last year, through its I’M IN Accelerator, which is aimed at black tech startups. The startup was part of the accelerator’s first cohort.

In November last year Rain co-founder and former MTN CTO Phumlani Moholi invested R2-million in the startup.

In addition, the startup also netted a R400 000 grant from MLabs in 2017 to help develop a minimum viable product (MVP).

In February Leteka told Ventureburn that the accelerator would host an all-women cohort which was set to start in May with the aim of accelerating at least five startups.

READ MORE: Meet the Nigerian Entrepreneur Whose Startup, Vmedkit, Is Backed by Facebook and TEF

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