If the $790 billion trucking industry was a country, it would belong to the G20. Add the last mile delivery industry, and it would be in the G10.
And yet, it lacks basic digitization innovations taken for granted in leading digitized payments industries such as tech. Truck drivers lack a cost-efficient and effective way to pay for fuel and other necessities on the road and must wait for paychecks in the mail every two weeks, and too many of them find themselves relying on payday loans.
Efficiency, speedy and effective payments have emerged among the top three pain points for driver retention — a top priority for the industry.
AtoB plans to change all that, aiming to be the first FinTech payments platform to modernize the trucking industry’s broken financial system.
“We are building the equivalent of Stripe or Square for transportation,” Vignan Velivela, CEO and co-founder of AtoB told PYMNTS’ Karen Webster in an interview.
The two-year-old startup recently announced it had raised $155 million in Series B funding to do just that. Its blue-chip roster of individual and institutional backers includes industry stalwarts Eric Schmidt, former Google CEO and Alphabet executive chairman; Marc Benioff’s TIME Ventures; AngelList Founder 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.
Tackling Fuel First
The company’s vision is to create a payments platform for carriers and the drivers who deliver for them providing financial services from A to Z.
“AtoB’s payments platform provides a suite of groundbreaking products for the fleet community for the first time, including no-fee fleet cards; instant direct-deposit payroll; and access to bank accounts and savings tools,” Velivela said.
The initial focus will be fuel writ large, the industry’s biggest cost. The platform enables drivers to pay for fossil fuels approved by carriers as well as being scalable to pay for eCharging stations and other green fuel sources which may emerge as the industry goes green.
The platform’s payroll system uses debit card rails to transmit payments for services provided on a per mile or other cost unit on what it claims is an instant basis — in practice, same-hour or same-day — every day.
Importantly, drivers don’t have to switch bank accounts to use the platform.
Expansion potential includes providing services to the drivers such as insurance and working capital.
In essence, AtoB is creating almost a neobank to serve the driver constituency. Applications transcend trucking to encompass any commercial driver who needs to fuel a company vehicle. The platform can serve independent contractors as well as full-time employees.
Big Tech for Small Businesses
The platform brings big 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 fewer than 20 trucks.
And in that trucking industry, drivers and carriers alike have to wait to get paid — all contingent upon delivery verification. AtoB aspires to speed this process by using system data to track the drivers’ progress along their route.
“AtoB is working to improve the lives of the operators and drivers who power the global economy,” Velivela said. “For too long they’ve been left behind, without the basic financial services that most businesses take for granted.”