On-demand logistics booking platform Moovo has shut down its operation last month. According to the company, logistics is a capital intensive business and it failed to raise necessary capital to keep afloat.
Founded by IIT alumnus Abhishek Anand and Anjani Kumar, Moovo was started as an intra-city logistics platform to book mini-trucks; later, it also ventured into inter-city logistics.
“We had to shut down operation last month as we couldn’t manage to raise follow-on funding,” said Abhishek while speaking to Entrackr over a phone call.
During 2015, there were literally 100-plus companies that had suddenly come up in the space, buoyed by the funding rush of that year along with success of the aggregator model in the taxi space.
Moovo used to offer mini-trucks Light Commercial Vehicle (LCVs) to SMEs, small businesses and individuals on demand as well as on fixed arrangement basis. The company had a fleet size of more than 7000 trucks on its platform last year.
At that time, it claimed that 80 per cent of the revenue came from inter-city transport along with run rate of Rs 2.2 crore on a monthly basis.
The Delhi (NCR)-based company had secured undisclosed amount of angel funding from Yuvraj Singh‘s YouWe-Can, Vikram Chachra (Co-founder, Eight Innovate); Pratyush Prasanna, Anindya Shuvra Sen, Bijay Sahoo (HR Head, Reliances’ Jio) and others.
Transportation is an extremely complex industry where it is difficult for a new entrant to make inroads. Payment cycle is the biggest challenge in overall logistics space (intra or inter city), thus it makes things difficult for new startups.
Most of the startups struggle to survive with credit cycle of 45-60 days along with capital might of competitors. Last year, about 10 startups including Trucksumo, Loadkhoj, Zaicus, TheKarrier, Truckmandi had ceased operations as they failed to fund credit cycle.