DeltaX wants to digitize the Andean freight sector

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Transport launch DeltaX is accelerating its plans to digitalize the trucking industry in its native Bolivia and beyond with a recent $1M seed round.

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DeltaX operates in the same space as Convoy, lodsmart and Sender – freight forwarding (in other words, helping companies move goods from point A to point B). But the startup is focused on the Latin American region, where cargo transportation is still in dire need of digital transformation, unlike other countries where this transition has already begun and accelerated in the context of the pandemic.

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“We are working to solve a huge logistical challenge in the Andean region,” said DeltaX CEO Luis Fernando Ortiz. “Road transport in this economic zone is inefficient and expensive, with huge implications for the competitiveness of our countries and the well-being of our truck drivers.”

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Millions of tons of cargo are transported by rail every year. Pan American Highway and its subsidiaries in Colombia, Ecuador, Peru, Chile, Bolivia and Paraguay. The cargo includes goods such as minerals from lithium triangle and further; grains, fruits and vegetables; as well as container imports. But the process is not perfect, and drivers pay the fare.

There are about 1 million truck drivers in the region, most of them independent, according to Ortiz. In its current form, this fragmentation has many disadvantages that DeltaX hopes to address with technology.

There are several layers to DeltaX’s activities: it facilitates communication between parties, automates shipment tracking and reporting, and increases the transparency of shipment documentation with new elements of financial technology and machine learning.

“Everyone in our sector follows this model, but we will be the first to apply it in our region,” Ortiz said.

Adaptation to Latin America

Digitization is undoubtedly a common need around the world for logistics, a sector that until recently has mainly dealt with phone calls, printouts and faxes. But although the situation began to change in many countries, Bolivia still lagged behind.

Ortiz knew about this problem firsthand: he used to work in the Chilean port of Arica, the region’s main transport hub. There he became a co-founder truckers club, most of whom came from neighboring countries and needed additional support. That’s how he knows they typically spend 25 consecutive days on the road away from their families – and the harm that lack of work predictability is doing to their quality of life.

Through a Fulbright Scholarship, Ortiz continued his studies in the United States, earning an MBA from Babson and a Master of Public Administration from Harvard. Now that he’s back in Bolivia, both have proven important to his new venture, where business acumen is perhaps as important as understanding the regulation and social context of drivers.

Understanding the needs of drivers has deeply influenced DeltaX technology. When it first launched in February 2020, it was mobile application for truck drivers. Mobile devices continue to play a key role in his strategy, as does WhatsApp, where bots provide answers to common questions on the go.

Better service to the 1,300 drivers associated with DeltaX is also why the startup plans to add an embedded fintech element to its platform, as is now common among Latin American startups. This will take the form of a working capital microcredit program providing advances against future earnings.

“Truck drivers are underbanked because their income is unstable; That’s why the fintech side is important to us,” Ortiz said.

DeltaX also hopes that the algorithms will be able to improve their predictive abilities and therefore the working conditions of drivers. Ortiz explained that instead of paying middlemen and not being sure they would find work, “the driver can say: I’m staying home this weekend because I know I have a trip scheduled for Monday.”

Hiring data scientists who can do this is one of the ways DeltaX plans to use the proceeds from its seed round. With a current team of 23, he also plans to add UX experts, software engineers, and product managers to keep improving his platform.

Neighbors help neighbors

The DeltaX seed round was supported by several funds from the US and Latin America: Magma Partnersfrom Chile, which led the round; Duro Venturesfrom California; 99 startups, from Mexico; and cybersons, from Paraguay. Bolivian Angels Network SC Angelesco-founded by Ortiz also participated.

While these names are significant, so is the fact that DeltaX participated in Harvard Alumni Accelerator for Entrepreneurs, the profile of some of his individual supporters is also noteworthy. Indeed, some of them hold high positions in the Latin American transport sector, including two startup founders: Ports CEO Alfonso de los Rios and Nuvocargo CEO Deepak Chkhugani.

Ortiz said DeltaX complements these startups because of its geographic focus and the sub-verticals it focuses on. A key aspect is its exclusive focus on land transport, which is associated with a sore point in the history of Bolivia: the country is landlocked, having lost access to the sea. in 1884 after the war with Chile.

The DeltaX fundraising event is a milestone for the Bolivian startup scene, one of the largest venture capital rounds in the country to date. This shows that the ecosystem is still in its infancy, but also confirms the progress it has made over the past few years.

Recent releases include Acquisition of NetComidas by PedidosYa and Venezuelan super app company Yummy buys Yaigo.

But Bolivia is not just a place for expansion-oriented M&A: it also has startups with regional ambitions, such as TuGerente and Ultra. DeltaX is one of them; it plans to open offices in neighboring countries in the coming months to expand its operations, starting with Peru.

In the longer term, DeltaX looks forward to further expansion into Chile, Colombia, Ecuador and Paraguay, Ortiz told TechCrunch. Will the transport sector in Latin America consolidate in the meantime? It will be interesting to see.

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