BANF, a South Korea-based startup providing sensing-based real-time truck tire profile technology, is in the midst of securing an additional sum of $3 million through an extended pre-Series A funding round.
“While the original blueprint did not encompass provisions for further capital infusion, we are fortunate that two significant financial institutions have taken the initiative to approach us, expressing their intent to invest,” BANF Head of Business Development Ron Lee told TNGlobal in a recent interview.
According to BANF, currently, tire-related incidents account for 30 percent of all accidents in the logistics industry, making it a significant concern. With the emergence of autonomous driving, the frequency of accidents is expected to increase due to extended 24-hour operations compared to the current 8-hour operations. In 2022 alone, the United States witnessed over 388,000 truck accidents, highlighting the urgent need for a solution to address this issue.
According to Lee, BANF’s primary focal points encompass the US and China, both of which constitute the most sizable segments within the realm of ground logistics. “It is noteworthy that Korea’s logistical framework diverges significantly from that of other nations, as the modality in Korea involves logistics companies engaging drivers who possess their independent fleets, in contrast to the paradigm of other nations where fleet operators typically own the vehicles,” he said.
“Despite our status as a nascent startup of merely two years, we are proactively engaged in strategic partnerships with prominent truck manufacturers, preeminent tire conglomerates, and even a NASDAQ-listed enterprise specializing in autonomous driving trucks. Yet, these endeavors represent merely the initial phases of our trajectory. We are resolutely addressing the substantial $44 billion market encompassing truck, bus, and trailer tires, with an unwavering commitment to advancement,” he added.
According to Lee, BANF, which has a valuation of approximately $30 million, has earmarked the target of a minimum revenue threshold of $10 million from fleet operators situated in the United States, China, and the European Union by the year 2024.
“Concurrently, upon the imminent release of our system into the market, we are poised to initiate the commercialization of our solution to autonomous truck operators,” he said.
In the interview, Lee also shared BANF’s plans, opportunities and challenges the company faced, among others.
Below are the edited excerpts of the interview:
What is BANF’s short-term plan (for the rest of the year) and long-term plan?
Beginning in June 2023, subsequent to a strategic escalation of our worldwide expansion, we have established over 10 partnerships with prominent international enterprises within a concise timeframe.
In anticipation of our imminent official system launch scheduled for CES 2024, substantial enhancements are underway for our user interface and user experience (UI/UX) to align with public release standards. Concurrently, we are actively cultivating extensive datasets through collaborative engagements with prominent entities in the global trucking industry and autonomous truck manufacturing sector.
Envisioned within our comprehensive long-term strategy, BANF seeks to engender a sense of security analogous to the assurance imparted by seatbelts and airbags. Our objective extends beyond the conventional perception of tires as mere consumables in the prevailing truck logistics landscape. Instead, BANF aspires to redefine itself as an avant-garde safety benchmark, propelled by the wealth of tire data. Our endeavor is to elucidate the profound significance and value that tire data holds within the context of smart logistics and the era of autonomous driving. Our commitment to augmenting safety and efficiency remains resolute.
Anticipating the future, we have earmarked the attainment of a minimum revenue threshold of $10 million from fleet operators situated in the United States, China, and the European Union by the year 2024. Concurrently, upon the imminent release of our system into the market, we are poised to initiate the commercialization of our solution to autonomous truck operators.
Would like to know more about your expansion plan. Is South Korea the main market for BANF? Are you looking for expansion in the country or regionally? What’s the plan and strategy?
Our primary focal points encompass the US and China, both of which constitute the most sizable segments within the realm of ground logistics. It is noteworthy that Korea’s logistical framework diverges significantly from that of other nations, as the modality in Korea involves logistics companies engaging drivers who possess their independent fleets, in contrast to the paradigm of other nations where fleet operators typically own the vehicles.
Despite our status as a nascent startup of merely two years, we are proactively engaged in strategic partnerships with prominent truck manufacturers, preeminent tire conglomerates, and even a NASDAQ-listed enterprise specializing in autonomous driving trucks. Yet, these endeavors represent merely the initial phases of our trajectory. We are resolutely addressing the substantial $44 billion market encompassing truck, bus, and trailer tires, with an unwavering commitment to advancement.
Can you walk us through the business model of the company? Where does revenue comes from? How big is the industry you are in? Where do you see opportunities?
We define ourself as a data company, not tire sales or sensor sales company. We are currently charging $20 per truck per month as a SaaS model. Considering ground logistics companies own at least 1,000 trucks, we do see our business model very scalable.
Competition: who are your competitors? Is the industry crowded? What is your competitive advantage against other competitor(s)?
The primary competitive advantage of BANF lies in its ability to collect real-time tire data and deliver safety and driving information through sensors embedded within the tires. This approach distinguishes us from traditional competitors who rely on indirect data collected through wheel sensors and acoustic sensors. Implementing such a system requires various technologies, and BANF excels in sensing-based technology, tire-based solutions, wireless communication technology in challenging environments, and real-time data processing technology.
What are the challenges you face? Is it difficult to convince truck companies to adopt BANF’s technology?
With tire-related issues causing 30 percent of total truck accidents and influencing 53 percent of the average fleet’s operating costs, fleet managers and logistics companies are presented with two primary considerations, driver safety and cost savings. And as BANF tire profile system not only provides ultimate safety but also reduces the cost of truck operation by 7 percent per year saving which is approximately $11,500, it is very thankful that truck companies have great interest in us.
How do you address these challenges?
If there is any concerns about trying out our system from our potential clients, we speak out three reasons why they have to work with us. First, we provide our sensors for free during pilot, already working with big names, and implementing our solution not only saves costs but is also able to gain driver life-saving mission.
Are you working with governments to promote the adoption of your technology?
Indeed, we have established collaborative partnerships with esteemed entities such as the Korea Expressway Corporation and the Ministry of Transport. Our sensors possess the capability to seamlessly ascertain real-time road conditions. This encompasses the discernment of intricate elements including the identification of treacherous conditions such as black ice leading to slippery surfaces, the detection of asphalt overheating, and the measurement of pothole depths. While various solutions exist that can merely identify the presence of potholes, the pivotal determinant lies in their depth. The significance therein is rooted in the fact that shallow potholes tend to pose negligible issues. Consequently, the crux of road management’s concern resides in pinpointing which potholes are of critical import, necessitating immediate repair prioritization.
In 2022, BANF received a Series A round of investment. How soon would you need to raise funds again? And how much?
We are presently engaged in securing an additional sum of $3 million through an extended pre-Series A funding round, building upon the foundation established last year. While the original blueprint did not encompass provisions for further capital infusion, we are fortunate that two significant financial institutions have taken the initiative to approach us, expressing their intent to invest.
Subsequent to this undertaking, our trajectory involves pursuing strategic investments within a span of 1.5 years.
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