Bengaluru-based intra-city logistics company Porter has raised Rs 50 crore Series C round from Mahindra Group. With this, the surface logistics company has raked in about Rs 135 crore from investors such as Sequoia, Kae Capital, Anupam Mittal and Sandeep Tandon.
Porter offers mini-trucks Light Commercial Vehicle (LCVs) to SMEs, small businesses and individuals on demand as well as on fixed arrangement basis.
Previously, it raised an undisclosed sum in Series B round in December 2016 while its Rs 35 crore Series A round was led by Sequoia and Kae Capital.
Two months ago, Porter had signed a definitive agreement to merge with Mahindra Group’s owned logistics marketplace SmartShift. The aforementioned funding amount seems to be a part of the deal.
Post this round, Porter is likely to be renamed Mahindra SmartShift. Presently, the company is operational in five cities – Delhi (NCR), Mumbai, Hyderabad, Bengaluru and Chennai.
Founded by IIT alumni, Pranav, Uttam Digga and Vikas Choudhary, the company claims to save 20-25 per cent on logistics spend for its clients and brings better Service Level Agreements (SLA), structured pricing, product safety et al for them.
With 5 million trips so far, the company claims to have 10,000 driver partners, 50,000 regular clients including 1,00,000 one time users. Besides five cities, Porter plans to expand its presence in 15 major cities like Pune, Kolkata, Ahmedabad, Chandigarh, Jaipur, Lucknow among others.
Market overview and Porter’s competition
Roadway logistics is a $150 billion industry in India, of which $30 billion is the last mile delivery. Currently, the market size of last mile delivery in urban cities is estimated to be around $10-12 billion.
To grab a slice of above marketsize, many startups including Porter ventured into this space. However, very few have been able to keep afloat.
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.
In 2016, about 10 startups including Trucksumo, Loadkhoj, Zaicus, TheKarrier, Truckmandi had ceased operations as they failed to fund credit cycle.
The funding news was first reported by paper.vc via RoC filings.