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Motsepe’s ARC ups investment in freight industry as Transnet falters

Motsepe’s ARC ups investment in freight industry as Transnet falters

Oct 11, 2023

// Business Live

African Rainbow Capital (ARC) Investment, the investment holding founded by Patrice Motsepe, has increased its exposure in online freight platform Linebooker and provided further outlay, as the upstart continues to grow market share while Transnet continues to falter.

ARC Investment in its annual report published on Friday said it has converted its loans to Linebooker into equity and injected an additional R67m of cash to help facilitate the company’s “accelerated growth strategy”.

“Infrastructure failure is a major obstacle to economic growth in SA. We have found opportunity in that challenge. Linebooker, SA’s largest freight platform, benefited massively from the increased need to transport goods to retailers due to Transnet’s inability to function consistently,” co-CEOs Johan van der Merwe and Johan van Zyl said in the report.

The Cape Town-based Linebooker was established in 2017. Its technology allows customers to manage transport-related functions on a cloud-based platform.

It provides its customers with access to 19,000 trucks from 900 transport companies.

ARC Investments said during the past 12 months, Linebooker onboarded several large credible customers including Coca-Cola, Sasol, ArcelorMittal, and Montego.

The company’s revenue increased by more than 99% year on year with a 3-year compounded growth rate of more than 130% per annum, and is aiming to achieve cash breakeven by the end of 2023.

Linebooker currently services more than 250 customers including blue chip corporates, farmers, and privately owned businesses.

Transnet’s freight division is battling an escalation of theft and vandalism of its infrastructure as well as a lack of locomotives, which has hamstrung its ability to service its clientele optimally.

Transnet Freight Rail maintains a complex rail network of about 31,000 track kilometres.

The challenges facing the state-owned company, which is currently without a CEO and CFO, has seen many companies transport their goods by road.

According to data from Ctrack Transport and Freight Index, road freight increased by 16.2% year on year in December.

Linebooker CEO Naudé Rademan said the company drew its customers from FMCG retailers and producers, chemical and industrial companies, mining operations, fresh produce producers, big farmers and beverage manufactures.

“We leverage our network of more than 930 transport companies, 19,500 trucks to manage transport procurement with and on behalf of our customers. Linebooker normally delivers about 10% to 15% savings in transport costs for customers and consistent truck supply, compared to pre-Linebooker. Transport procurement and operations, through digital freight platforms, are quickly changing the way transport has been managed historically,” Rademan told Business Day.

“We are in the fortunate position that not one of Linebooker’s contractual customers have experienced seasonal supply constraints thus far. The transport market is enormous, having the ability to quickly communicate, negotiate and trade with the whole market is what differentiates us.”

Rademan said SA still needed a strong and efficient Transnet as that would also benefit Linebooker. “Strong rail infrastructure and operations are critical for trade and manufacturing to succeed, which increases overall freight movements. Improvement in Transnet operations will increase overall volume movement in SA and so should also have a further positive impact on Linebooker growth,” he said.

ARC Investment has also looked to take advantage of the country’s energy crisis through its investment in GoSolr, a residential solar energy company.

Van Zyl and Van der Merwe said GoSolr was a scalable business.

“Energy disruptions also allowed us to identify GoSolr, a business that can make a big difference. We will continue to look for further opportunities among the challenges we face as a country. We also welcome Business stepping in to support the government in gaining traction in addressing some of the most pressing challenges for our economy.”

GoSolr was founded in 2021 and began with installations in Cape Town, rapidly expanding to other major metropolitan areas in 2022.

by KABELO KHUMALO

khumalok@businesslive.co.za

Note: This article was originally published on Business Live.

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Linebooker Pty (Ltd) – Main Office
Contact number: 021 201 6969
Email: info@linebooker.com
Address: Farm 1, Ground Floor, Building C, The Vineyards Office Estate, 99 Jip De Jager Dr, de Bron, Cape Town, 7530

Linebooker (Pty) Ltd – Johannesburg Office
Contact number: 021 201 6969
Email: info@linebooker.com
Address: 20 Rosebank Road, Rosebank, Johannesburg