South African vehicle-tracking group Karooooo is quietly building a second growth engine in the form of an ultra-fast delivery business that is expanding at more than twice the pace of its established Cartrack fleet-management operations.
The company, which is listed on Nasdaq with a secondary inward listing on Johannesburg’s stock exchange, reported last week that its Karooooo Logistics unit grew revenue 46 per cent year on year to ZAR177m (US$10.9m) in the three months to the end of May 2026. The business connects large enterprises to a network of third-party delivery drivers, enabling same-day and on-demand fulfilment — a market that is being reshaped globally by the rise of so-called quick-commerce.
Zak Calisto, Karooooo’s global chief executive, said the logistics arm had benefited from “demand for Q-commerce or ‘quick-commerce’ orders, a type of e-commerce focused on ultra-fast delivery.” The business offers what it terms delivery-as-a-service, or DaaS, to corporate customers who want to scale their online fulfilment operations without building their own fleet.
While the logistics segment remains a relatively small part of the group — accounting for just over a tenth of consolidated revenue — its rapid expansion is starting to attract attention. In the first quarter of the 2027 financial year, total revenue at Karooooo Logistics outpaced the 19 per cent subscription revenue growth delivered by Cartrack, the group’s core telematics unit. Cartrack’s subscription revenue reached ZAR1.35bn during the quarter, but its pace of expansion, while robust, now trails the logistics division by a widening margin.
The logistics arm has been profitable from an early stage. Operating profit jumped 50 per cent year on year to ZAR15m in the May quarter, holding its margin steady at 8 per cent. Adjusted earnings before interest, tax, depreciation and amortisation rose 48 per cent to ZAR15m. Cumulatively, the platform has paid out more than ZAR1bn ($61m) to drivers since Karooooo acquired it in 2021.
Karooooo’s model is capital-light by design. Rather than owning vehicles or employing drivers directly, it operates a technology platform that matches delivery demand from large retailers and consumer brands with an elastic supply of independent couriers. That structure keeps fixed costs low and allows the business to scale in line with customer orders, though it also means gross margins are structurally thinner than in the core subscription business. The logistics gross margin stood at 32 per cent in the quarter, compared with 73 per cent at Cartrack.
The group bought 81 per cent of the logistics business — then called Picup — in 2021, betting that the same enterprise customers using Cartrack’s fleet-tracking tools would also want a managed delivery solution. The thesis appears to be playing out, with the company saying growth is being driven by large enterprise customers investing in their e-commerce operations.
South Africa, which remains the group’s dominant market with roughly three-quarters of Cartrack subscribers, is also the primary geography for the logistics division. The rise of quick-commerce in the country has been fuelled by the expansion of established retailers such as Checkers Sixty60 and Woolworths’ Dash, as well as pure-play platforms. Karooooo Logistics positions itself as the infrastructure layer behind such offerings, providing the driver network and delivery orchestration technology.
The logistics division’s performance has helped offset currency headwinds that are dampening the reported contribution from Cartrack’s international operations. A strong South African rand clipped subscription revenue growth from Asia Pacific, Europe and the rest of Africa, which together grew just 4 to 7 per cent in reported terms but 11 to 17 per cent on a constant-currency basis. The logistics business, being almost entirely domestic, is shielded from that translational drag.
Still, the unit is not yet large enough to move group-level numbers on its own. Consolidated revenue rose 22 per cent to ZAR1.56bn ($94.8 million) in the first quarter, driven primarily by Cartrack’s accelerating subscriber base, which crossed 2.8m after a record 142,472 net additions. Group operating profit reached a record ZAR410m, up 16 per cent.
The challenge for Karooooo will be whether the logistics division can maintain its pace of growth without eroding profitability or requiring significant fresh investment. Operating expenses at the unit rose 62 per cent in the quarter, reflecting spending on driver acquisition and training, and the company signalled it would continue to invest “prudently” to scale the platform. The gross margin improved to 32 per cent from 29 per cent a year earlier, suggesting some operating leverage is beginning to emerge, but the business remains sensitive to driver payment costs, which represent the bulk of its cost of sales.
The group’s overall outlook for the 2027 financial year, reaffirmed alongside the quarterly results, makes no separate mention of the logistics unit. Guidance for Cartrack’s subscription revenue growth of 18 to 24 per cent and group earnings per share of ZAR38.50 to ZAR40.00 leaves the logistics business as an unguided variable that could provide upside if its strong momentum continues.
For investors, the emergence of a meaningful second act offers diversification beyond the fleet-tracking market, where Karooooo faces intensifying competition from global players such as Samsara and Powerfleet. Quick-commerce is itself a fiercely contested space, but Karooooo’s position as a neutral infrastructure provider — rather than a consumer-facing delivery brand — may insulate it from the worst of the margin wars that have plagued direct-to-consumer courier services in other markets.
The logistics arm is also beginning to influence how Karooooo describes itself. In its latest filing, the group repositioned its platform as an “operational intelligence” suite that spans vehicles, assets, field workforces and delivery workflows — a broader canvas than pure telematics. Whether that repositioning resonates with investors will depend in large part on whether the DaaS business can sustain its trajectory and, eventually, contribute a more material share of group profit.