AtoB Raises $130 Million to Fuel Transportation Payments Services
Transportation industry payments solution provider AtoB has raised $130 million in equity and debt funding.
The Series C round was led by General Catalyst and Bloomberg Beta with participation from Mastercard and trucking and logistics industry players, the company said in a Thursday (Sept. 19) news release.
“Trucking is one of the largest occupations in the US, with small and medium-sized trucking businesses making up the vast majority of fleets today,” said AtoB CEO Vignan Velivela. “These milestones will allow us to better support truckers and the small businesses they represent — the backbone of America’s economy — with tools that allow for transparency and efficiency.”
According to the release, the combination of high fuel costs and tight profit margins threatens the financial stability of trucking firms.
“By simplifying payment processes and providing 24×7 instant access to earnings through the AtoB Carrier Wallet — designed for managing both fuel and non-fuel expenses — AtoB helps drivers optimize their finances, reduce fraud, and maintain the stability essential for success in a challenging industry,” the company added.
The release notes that in the last year, AtoBe has seen a 500% increase in revenue and volume with its partners, growth driven by collaborations with companies like Uber Freight.
Speaking with PYMNTS CEO Karen Webster earlier this year, Velivela argued that slow payments represent a “silent tax” on fleet management and truckers.
Paper checks remain the chief way of paying both short-haul and long-haul truck drivers. And payroll loans are the norm, as drivers can spend days or weeks on the road, needing to cover everyday costs like food, gas, lodging or repairs.
As for the companies paying them, these are typically smaller businesses, with smaller fleets. Under 3% of them have more than 20 vehicles on the road.
“If you have slow payments, you have a higher cost of working capital, and this shrinks margins and companies have to raise their prices constantly,” Velivela told Webster.
Meanwhile, research by PYMNTS Intelligence finds that 93% of truckers would use instant payments if offered the chance, though many companies in their sector have yet to adopt them.
The research showed that of the transportation small- to medium-sized businesses (SMBs) did not use digital payments, 24% said their banks do not offer them. Another 29% of this group said difficulty of use or insufficient knowledge were holding them back.
“Cost concerns were also a factor, with 23% saying instant payments were too expensive,” PYMNTS wrote. “Additionally, 22% pointed to limited payee acceptance.”
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