Trucking startup Trella has decided to exit Pakistan where the economy is experiencing one of its worst crises. The Egypt-based company stopped taking new orders last month, according to two people familiar with the matter. Trella, which raised $42 million in 2021 from investors including the venture arm of A.P. Moller-Maersk A/S, didn’t respond to a request for comment.
Recent macroeconomic turmoil means Trella’s business there was unsustainable, the people said. The startup, which entered Pakistan in 2020, will retain some staff to assist its operations in Egypt, United Arab Emirates, and Saudi Arabia.
Because of a delay in its loan program with the International Monetary Fund, Pakistan has received multiple downgrades from rating agencies. It has restricted imports due to a dollar shortage, seen its rupee lose a third of its value, and fuel prices nearly doubled in the last year alone.
All of these factors have had an impact on the trucking industry. Trella is one of the few prominent entities impacted by the situation and therefore has decided to exit the Pakistani ecosystem.
Pakistan has incurred multiple downgrades by rating agencies because of a delay in its loan program with the International Monetary Fund. It has restricted imports because of a dollar shortage, seen its currency drop by a third of its value, and almost doubled fuel prices in the past year. All that impacts the trucking business.
Pakistan’s startup economy is also experiencing a funding crunch along with a squeeze in the valuations of global technology companies. In the past year, Vitol-backed VavaCars has exited Pakistan, Dubai-based Swvl Holdings paused daily rides, Uber’s Careem suspended food delivery and Airlift, which raised a record $85 million, folded.
Starting in Egypt in 2019, Trella currently has a presence in Egypt, Saudi Arabia, and Pakistan. In a statement, it said that the road freight market in the Middle East, North Africa & Pakistan – the region Trella hopes to dominate, is worth $50 billion. The startup connects shippers to carriers while helping solve challenges faced by both parties. For shippers, the platform serves as a reliable option with transparent and fair pricing to move their goods and track their shipments in real-time – and carriers (or truck drivers) can improve their load utilization and efficiency by using the platform.
Though Trella had sufficient financial backing for operations in Egypt and Pakistan as Sustainable Finance (ALMA) and US International Development Finance Corporation (DFC) recently announced the launch of a loan guaranty transaction in Pakistan and Egypt. The guarantee facility, valued at $4.2 million, will allow ALMA to deploy $6 million in debt financing to support the operations of Trella, an innovative digital freight marketplace in Pakistan and Egypt.
ALMA’s borrower Trella is the fastest-growing digital freight marketplace in Pakistan and the Middle East, having facilitated over two million tons of shipments in 2021. Trella’s platform connects corporate shippers with trucking carriers across the region, driving efficiency in a highly fragmented logistics industry. ALMA and DFC’s support towards Trella will drive several development impacts including an increased income for truckers who are micro, small, and medium enterprises (MSMEs), decreased GHG emissions in logistics due to better routing, and higher load utilization. The transaction also qualifies as a “2X Challenge” investment by advancing employment opportunities for women in the logistics industry in Pakistan and the Middle East, where women are traditionally underrepresented.
All of this funding and backing went to sewers as Pakistan’s economical situation has become worse and worse and Trella along with many other startups has been left with no other option than exiting such a high-risk market.