Photo - Abivin
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Abivin

AI Platform to Optimize Enterprise Logistics

Vietnam
Market: Appliances, Logistics and warehouses, Another, Artificial Intelligence
Stage of the project: Operating business

Date of last change: 19.06.2021
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Idea

Founded with the mission to optimize the enterprise value chains, Abivin develops Abivin vRoute - an AI-powered Logistics Optimization Platform that helps companies save logistics costs, automate manual processes, and improve Supply Chain Visibility.

Current Status

After 6 years of development, Abivin is now at the scale stage, where we’re expanding our presence to different countries in the ASEAN region. Besides Vietnam, we have customers in 5 other countries: Myanmar (2017), Singapore (2018), and Indonesia (2019), Japan (2020), and the Philippines (2021). We are aiming to conquer the rest of ASEAN in the next 2-3 years.

At the moment, our platform is processing more than 75 thousand container shipments and 300 thousand delivery orders per month. The freight traffic volume processed by Abivin vRoute is 1.3B tonne-kilometer per year, equivalent to 1% of the total freight traffic volume of Vietnam.

Additionally, we’ve been widely recognized in global awards such as Startup World Cup 2019 in Silicon Valley, or the ASEAN Entrepreneur Award hosted in Korea in 2020. Abivin has also partnered with Government Agencies and collaborated with Google, SAP, Oracle, Microsoft, JETRO, as well as multiple Startup and Acceleration Programs in the region.

Market

Customer Segments:
Our target customers are the 5 sectors in the Supply Chain. They are Ports or Container Freight Operators, Manufacturers, Distributors, Retailers, and Carriers/Third-party Logistics Companies.

Market:
We are currently targeting the ASEAN market and 95% of our target revenue comes from 7 countries: Indonesia, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam. We follow the B2B model, so we calculate our target market value based on the number of target companies.

There are approximately 60 million Manufacturing, Wholesale and Retail Trade, Transportation, and Communication companies in ASEAN. Of which, 29.8% has logistics cost above 10% of revenue. Those are the companies that we target. With the Average Annual Contract Value of $17,000, the Total Addressable Market (TAM) is calculated to be roughly $306 billion.

Given such a huge market, we continue to narrow down the target segment that we want to acquire in the near future. In the next 5 years, we are targeting companies in the segments of FMCG, Food, Consumer electronics, Goods transportation by land. Of those, we also want to target companies with plans to adopt AI/Optimization tech. The number of companies satisfying the above conditions is 1,320,623. With the Average Annual Contract Value of $17,000, the Serviceable Addressable Market (SAM) is calculated to be roughly $22.5 billion.

Problem or Opportunity

The supply chain is made up of different players: Ports/Container Operators, Manufacturers, Distributors, Retailers, Logistics Service Providers.

The above supply chain players are running logistics operations manually, without the support of advanced computing power. This leads to multiple problems: (1) many hours spent manually create and dispatch delivery route plans; (2) inability to control effectively the working progress of delivery men when they are moving on the field; (3) passive decision-making when encountering fuel-claiming fraud or low-quality customer services; (4) no visibility over the supply chain.

The above problem leads to high logistics costs. In 2017, Vietnam’s logistics costs accounted for nearly 20.9% of gross domestic product, double that of developed economies and 5% higher than the global average. According to information from the Ministry of Industry and Trade and Vietnam Logistics Association (VLA), the value of the logistics market in Vietnam is equivalent to 21-25% of national GDP, but the logistics industry only contributed very little, about 2-3% to GDP.

Abivin believes that the key to reducing logistics costs is modern, powerful technologies developed by Asian people that are within reach of companies across Asia. By solving those problems, we can help reduce the logistics costs of Vietnam in particular and that of Asia in general. From there, logistics companies, FMCG companies in Asia can use the saved money for more helpful purposes, which will stimulate their development at a faster rate.

Solution (product or service)

Understanding the pain points of the Logistics Industry, Abivin built an AI-powered Logistics Optimization Platform to help companies cut down on logistics costs, improve operational efficiency, and enable end-to-end supply chain visibility.

The platform consists of 2 parts: A web Application for Managers and a Mobile App for Drivers alongside four main features: 3D Loading Optimization; Delivery Route Optimization; Transportation Management; and Intelligent Dashboard.

However, the key component that sets us apart from others is our proprietary Optimization Algorithms which can assist people in making complex planning decisions automatically.

Transport Planners struggle daily making delivery plans manually for thousands of delivery points among different vehicles and constraints, which is very time-consuming and inefficient. Some companies have tried open-source or paid tools, but those services are very limited to only a few (~10) basic parameters. Meanwhile, having powerful algorithms, we are able to solve more than 30 constraints, including complicated conditions such as load planning, multimodal transport, or road constraints simultaneously.

Competitors

Some of the companies providing logistics software in Asia are Loginext, Locus, Versafleet, Smartlog. They are our main competitors in several markets.

Advantages or differentiators

We are different from the competitors for some reasons:

Firstly, we have an impressive client portfolio including customers are the top 10 biggest corporations nationwide and globally. This gives us a strong push for market penetration.

Secondly, Abivin offers businesses the best price over benefits in the SEA market (and even globally) with persuasive ROI.

Thirdly, we provide great local support for customers based in ASEAN, with automatic translation and localization for app and user guides. Plus, flexible features, customizations are available based on customers' requests.

But above all, technology is the biggest factor that differentiates us from competitors.

Developing optimization algorithms is not an easy task. To develop optimization algorithms, you not only need normal data scientists, computer scientists, or computer engineers. You need mathematicians. Our Abivin team consists of multiple champions of international informatics and mathematics competitions, as well as machine learning engineers and computer scientists with years of experience. With such a robust team, we are confident to solve the most difficult logistics problems, satisfying constraints that our competitors can not address effectively.

Our technical capabilities also allow us not only to solve problems effectively but also to prioritize solving the most difficult problems. We successfully solved the Vehicle Routing Problems, 3D Loading, Pickup and Delivery Problems, and Carriers Selection. These logistics problems are not new, but since technologies like the internet, cloud, or mobile have developed, the above problems have become more and more complex in terms of practical execution. By leveraging a team with strong technical capabilities, along with a huge cost advantage compared to other competitors, we have successfully brought high saving values to the biggest corporations in each segment. Moving forward, we will apply our technology to smaller companies to achieve sustainable growth.

Finally, once we gather enough data from different types of delivery models, the next step is to perform machine learning. In each segment, there are 1-3 biggest companies that hold ~80% market share. By having those companies as our customers, we have gathered enough data to stay far ahead of the competition. Our algorithms will utilize the data, learn from historical route plans, and produce more efficient routes in the future. For example, we can learn how to best cluster the delivery points in each area, so as to apply the same mechanism to other route plans.

Finance

We have two revenue streams, they are:
Professional services revenue: It is generated from three main activities: deployment, customization, and development.
Subscription fees revenue: It is charged on a per-user basis or per-transaction basis.

Business model

Our Business Model is B2B SaaS model where we charge professional service fees and Ongoing Subscription Fees.

Money will be spent on

We will divide our new investment into 2 areas:

- Product R&D:
We will create a roadmap that helps our product to cater to multiple types of businesses in the supply chain, by solving various problems in logistics management. From the technical point of view, we are looking to expand the solution's capabilities and solve the SPAR problem in Logistics. SPAR stands for Scheduling, Packing, Assigning, and Routing. Currently, Abivin has successfully solved 2 problems, Routing and Packing. From customers’ point of view, our solution in the next few years will be completed to support every delivery model of the 5 key players in the supply chain.

- Increase in Sales & Marketing:
We target to double and even triple our Sales and Marketing team in order to quickly capture the market. We do notice the logistics optimization field has become increasingly competitive over the last few years, thus, this is a prime period for us to quickly expand and surpass other competitors. Additionally, Abivin is going to invest in multiple co-sell, resell, referral programs with numerous well-known sales partners in the market. Our strategy is to build partnerships with reputable software sellers to accelerate market acquisition.

Offer for investor

Around 20-30% equity

Team or Management

Risks

1. Large amount of up-front R&D:
The logistics in general, Vietnamese logistics, in particular, is now facing many challenges in cost reduction and optimization, which requires a great deal of up-front R&D investments.

2. Lack of qualified professionals in Vietnam:
Given that Abivin is following a B2B SaaS business model and addressing complex mathematics problems in logistics, we require a very high standard of experience and skills for our staff. Therefore, Abivin incurs higher talent acquisition costs (recruitment) and retention costs (internal training and competitive salary).

3. Entry of new competitors with lower entry barriers:
Given the development of the logistics industry lowering the education cost, government programs assisting with the innovative initiatives as well as the increasing demands for logistics innovation, the opportunity is wide open for IT logistics startups. Compared to Abivin, it can be said that the barriers to enter the logistics industry, especially logistics software, are no longer high. Additionally, competitors can enter without re-educating customers when the market becomes more mature. As an innovator in this market, it takes 2-3 years for Abivin to educate the market. New players will have a whole already-educated market to provide their solutions.

Incubation/Acceleration programs accomplishment

- Microsoft for Startup
- Grab Ventures Ignite
- Shinhan Future’s Lab
- RISE.AI
- AppWorks Accelerator

Won the competition and other awards

- Top 4 winning startups of Microsoft’s inaugural Emerge X Competition in Asia Pacific region (2020)
- The winner of the ASEAN Entrepreneur Award 2020
- Champion at Startup World Cup 2019 in Silicon Valley ($1,000,000 investment prize)
- Asian Rice Bowl Startup Awards: Best Logistics and Supply Chain Startup in ASEAN (2018)
- First Prize Winner - Techfest Vietnam (2018) - the largest annual event for the creative startup community in Vietnam, chaired by the Ministry of Science and Technology (S&T).
- Grants from Finland-Vietnam Innovation Partnership Program (2016, 2017)
- Google Cloud Official Partner

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Idea
Current Status
Market
Problem or Opportunity
Solution (product or service)
Competitors
Advantages or differentiators
Finance
Invested in previous rounds, $
Business model
Money will be spent on
Offer for investor
Team or Management
Mentors & Advisors
Lead investor
Risks
Incubation/Acceleration programs accomplishment
Won the competition and other awards
Invention/Patent
Photos
Product Video