SA on-demand truck hire startup Droppa nets multi-million rand investment

Droppa, a Johannesburg based on-demand platform for trucks and bakkies, has secured a multi-million rand investment from SA investor IDF Capital.

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

Mufamadi said the deal, which was concluded two weeks ago, is in the form of a convertible note. He would not disclose the amount that IDF Capital had invested in the startup or the stake that the investor had taken, but when pressed by Ventureburn conceded that it was over R5-million.

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.

When pressed Droppa founder Khathutshelo Mufamadi said IDF Capital’s investment was above R5m

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.

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 ranges from hardware store, warehouses, furniture stores and fresh produce among other.

Droppa subsequently introduced a Droppa API for developers, which allows ecommerce 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 wants 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-percent 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 in the accelerator’s first cohort (see this story).

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 (see this story).

Read more: I’M IN Accelerator finally under way, here are the startups in the first cohort
Read more: SA accelerator for black startups I’M IN tight-lipped on selection of first cohort [updated]

Featured image: Droppa founder Khathutshelo Mufamadi (Supplied)