Almost a decade ago, in 2008, a consulting firm Orkash Services published a white paper stating that the logistics sector was at a potential inflection point in its growth and service maturity model, driven by an unprecedented economic boom and fast evolving market dynamics.
The firm estimated that the Indian trucking industry would need a growth capital of Rs 2,00,000 crore over the next two years. The industry can take in $6-7 billion of PE investments by 2010.
The study said the trucking industry is riddled with deficiencies such as high level of fragmentation, low penetration of technological advancements and lack of skilled manpower. The deficiencies if not solved may impede the sector’s growth.
Indian startups acknowledged the issue cited in the report and started working on it. In the past ten years, since the publication of Orkash’s whitepaper, a lot has been done to organize the $30 billion (according to current figure) truck industry.
Pushkar Singh, an IIT-Kharagpur graduate, had a direct confrontation with inefficiencies in the logistics sector, during his ITC tenure. He had to spend hours coordinating with logistics trucks, which often did not report on time at the factory.
This unreliability and unaccountability had a cascading effect on the operations and was a major pain point, making him realize the existing gap in logistical services that could be bridged only through a tech-enabled solution.
He met his other two friends, Sudarshan Ravi and Ankit Parasher, both graduated from IIT-Kharagpur, and discussed the idea with them.
The two concurred with the identified problems, which were complexity, congestion and missing data points, and agreed to work together to solve it.
They believed that these advancements which are only possible via technology unravel hidden efficiencies leading to cost savings, better asset utilization and higher earnings for the trucking industry.
In January 2015, the team of trio launched Letstransport. The platform enables last mile logisitcs for enterprises. Its technology allocates delivery to a network of aggregated trucks and enables intra-city logistics for large enterprises (Coco Cola, Amazon and Big Bazar), supply chain companies and local retailers.
“Our full-stack technology enables a complete visibility and control on logistics for both clients and drivers. Client dashboard enables real time tracking, monitoring, geo-fencing, route optimization, delivery management and accounting,” said Pushkar Singh, Cofounder, Letstransport.
He adds that his partnerships with OEMs and financial institutions ensure higher savings and financial inclusion for driver community. This ensures long term benefit and hence better retention on the platform.
Its technology allocates delivery to a network of aggregated trucks which, it claims, ensures 99.3 per cent reliability to clients by leveraging the power of aggregation.
Letstransport has shown from modest to hyper-active growth in the past two-and-a-half year.
The company initially bootstrapped the business for six months until it raised a funding of $1.3 million in August 2015. The funding round was led by Singapore-based Japanese venture capital firm Rebright Partners along with participation from angel investors Ankush Nijhawan, Gaurav Bhatnagar and Manish Dhingra.
In January this year, the company raised $4 million in a Series-A round of funding led by Japan’s payment gateway company GMO and Neelesh Bhatnagar, former CEO of Landmark Arabia.
In these years, the last-mile logistics providers started the service from Bangalore and has now expanded across six cities, including Delhi, Chennai, Mumbai, Hyderabad, Vijayawada and Tiruchirapalli.
Besides, the company boasts of being a market Leader in this category; claims to be working with over 150 clients and over 5000 aggregated trucks.
With these numbers, the startup has scaled up its business by 30x in terms of its operations in the last 2 years. It also envisions to grow its revenue 20 times by the end of 2017.
It also has a robust team of 150 people who are building the platform and disrupting the last mile logistics category.
What market has to offer
The logistics market in India constitutes 14.4 per cent of the country’s GDP and is expected to be worth US $307 billion by 2020, according to various industry estimates. The sector is expected to grow at a CAGR of 15-20 percent between FY2016-2020.
In spite of the present growth and the expected growth figures, the operation within the industry is quite primitive and holds an immense opportunity for being disrupted by new methods and technologies. This makes a growth case for many technology-based logistics startups.
In this competitive market, there are many startups which are working to organize the logistics market and create a niche for each of its offering.
In last-mile logistics, Porter and Blowhorn are some of the startups which are offering a very similar deal as Letstransport. Besides, there are many other startups such as Delhivery, Shadowfax, Runnr, Qikpod which are offering various other logistics solutions.
Future strategy of Letstransport
The company aims to open its operation in 11 cities, including tier I and tier II.
“We currently have only 2 per cent of total trucks of Bangalore, which we want to increase 10 per cent capacity by end of 2018,” said Singh.
He adds that there is immense potential in the market to achieve high figures. He aims to make a larger impact in the industry with his team, technology and service.