Startup Watchlist: Indian Logistics Tech Startups To Watch Out For In 2020

This article is part of Inc42’s Startup Watchlist, an annual series in which we list the top startups to watch out for in 2020 from industries such as agritech, deeptech, logistics, healthtech, edtech and more. Explore all the stories from the ‘Startup Watchlist’ 2020 series here.

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Distances no longer serve as a barrier for humans to achieve their dreams, thanks to 24×7 connectivity in most places around the world. But while internet growth has been seamless for the most part in India, the delivery of products and services has been anything but smooth in the Indian context. The seachange in transportation and logistics over the last decade has challenged distances and made the world a much smaller space, even for global tech giants.

While the logistics tech sector has been around for decades, the ecommerce boom in the early 2000’s acted as a catalyst for the logistics sector in India. The presence and impact of logistics in the day-to-day lives of people are so ingrained that we often fail to notice how quickly the delivery arrives or fathom the intensity of activity in this space. From the food on the plate to gadgets and large appliances, the logistics sector has made it possible for most businesses to reach the end consumer.

Since the sector has had a long presence, there are already unicorns to look up to. The likes of Delhivery, Rivigo, and BlackBuck have set the pace in the Indian market. There lies a wide scope for innovation to serve customers in a more efficient manner. This seems to be the mantra of new-age logistics startups in India.

Inc42 has curated a list of some logistics tech startups that have the potential to outshine in 2020.

Editor’s Note: The below list is in alphabetical order and is not meant to be a ranking of any kind.

Blowhorn

While inter-city logistics are handled by major players, the challenges in last-mile delivery make it difficult for internet businesses and ecommerce companies to fulfil orders from hub to customer doorsteps.

Blowhorn is an intra-city logistics tech company operating across Bengaluru, Chennai, Delhi, Hyderabad, and Mumbai. It claims to have pioneered the spot and fixed-contract transportation market and is now turning its attention to speed across logistics offerings. The startup provides fixed contract-based as well as variable engagement models for large enterprises, SMEs and individuals.

“While most logistics startups have been focussed on shaping intercity logistics, around 40% of the total supply chain cost is intracity. Also, we are seeing a clear industry-agnostic trend towards higher fulfillment rates at faster delivery times within cities. Customers are no longer willing to wait for the goods they have ordered. This represents a huge challenge for intra-city supply chains, and a huge growth opportunity for nimble logistics start-ups optimised for speed such as Blowhorn,” cofounder Mithun Srivatsa told Inc42.

Talking about the business model and revenue generation, Srivatsa said Blowhorn operates in an asset-light marketplace model similar to Uber or Airbnb. Adding that their monetisation model is based on a take-rate that is the difference between our total cost of accessing the supply and the revenues we get from the customer for the logistics service provided.

In terms of market impact, Blowhorn claims to work with more than 100 enterprise customers including names such as Amazon, Flipkart, and Udaan on the demand front with a 95% retention rate. On the supply front, the company has about 3000 vehicles operating on a daily basis. “Our data shows that more than 10% of our owner driver-partners go on to buy a 2nd mini-truck, highlighting the economic impact that Blowhorn provides to its driver partner network. More than 80% of our driver-partners have been able to provide for their children’s education,” Srivatsa added.

Fr8

Founded in 2016 by Vasanth Immanuel and Jayendran Panneerselvam, Fr8 is a technology-driven logistics service provider, offering long-haul trucking solutions to large corporations, SMEs, and the agribusiness ecosystem. The online marketplace for logistics transactions helps customers move truckloads between cities with little to no friction.

Cofounder Jay Panneerselvam told Inc42, “A truck in India runs only for 15 days in a month. The other 15 days are wasted waiting for loading and unloading. Addressing this will improve efficiency and better incomes for truck owners.”

Fr8 is headquartered in Chennai and is backed by the likes of Omnivore Partners. The startup earns revenue by charging a brokerage fee of 4% for every order connected to the platform. For 2020, the startup plans to increase orders to 3K orders a month by expanding from 22 to 50 branches.

Freightwalla

Founded in 2017 and headquartered in Mumbai, Freightwalla is a technology-enabled Indian shipping freight forwarder. The startup claims to focus on addressing inconsistent service levels in the B2B international logistics industry by leveraging technology to offer real-time updates, online documentation services, and consistent pricing.

Cofounder and CEO Sanjay Bhatia believes that India’s coastal shipping has a number of challenges that Freightwalla is solving. He told Inc42, “The biggest challenge for the logistics industry today is the dependence on traditional approach which entails manual processes that require a huge number of man-hours to get the job done. This results in a lot of manual errors which ultimately cause either cargo delays or cost escalations. Apart from that coastal shipping in India gets hampered due to the weak landside and port facilities, and insufficient depth at ports discourage large vessels, thus curbing the large scale use of it for freight movements.”

Founded by Sanjay Bhatia, Bharat Thanvi and Punit Java, for 2020, the company plans to invest in AI and deep learning to automate the process of extraction and generation of key information for shipping documents. It further plans to improve connectivity with the shipping lines and create a central hub for simplifying the coordination with the multiple parties involved in a booking process.

Bhatia added, “We have crossed a milestone of having on-boarded over 600 businesses this year, across SMEs, large Indian enterprises and MNCs. Our aim is to get the numbers in four digits over the next year.”

LetsTransport

Letstransport is a B2B tech-logistics solution provider for intra-state deliveries. The startup aggregates light commercial vehicles for urban logistics and has on-boarded more than 50K truckers across 14 cities with up to 10 tonnes of loading capacity.

The startup was founded in 2015 by Pushkar Singh, Sudarshan Ravi Jha, and Ankit Parashar. Letstransport is headquartered in Bengaluru and registered a revenue of INR 47.59 Cr. in FY18 as per filings on Tofler. The startup believes that the $30 Bn+ market opportunity, presence of more than 10 Mn light commercial vehicles and fragmentation along with the fact that more than 90% of vehicles are owned by individual driver-cum-owners is the biggest opportunity.

However, in terms of challenge, cofounder Pushkar Singh told Inc42, “The biggest challenge is that the level of tech adoption among truckers is relatively lower. There needs to be a conscious change in this and we are trying to drive this through enabling them to get on smartphones, holding repeated training for drivers to educate them on how to use our application and technology in general.”

He added that traditionally, there has been a dearth of talent in the logistics industry but with the rise of tech-logistics players like Blackbuck, Rivigo and Letstransport, the sector has been able to pull in talent, which otherwise would not have been possible. Letstransport plans to expand to 20 cities by the end of next year along with expansion to enterprises in the apparel, pharma and auto sectors.

Locus

With a customer base of over 40 enterprises, including the likes of Blue Dart, Bigbasket, Myntra, Unilever, Tata Sky, Urban Ladder, and Lenskart, Locus is looking to bring efficiencies in the logistics sector using geocoding, deep machine learning and proprietary algorithms. It offers smart logistics solutions like route optimisation, real-time tracking, insights, beat optimisation, efficient warehouse management, vehicle allocation, and utilisation.

The startup was founded in 2015 by Nishith Rastogi and Geet Garg to bring predictive analytics to the logistics industry. Cofounder Rastogi told Inc42 that it has an extensive range of products lined up for both horizontal and vertical penetration across enterprise supply chains globally, with many coming this year.

“Our vision to become a digital supply chain officer for businesses is centered around launching products to help enterprises in automating supply chain decisions across three levels – strategic, tactical and operational. Our current suite of products allows companies to automate operational decision making, and we plan to launch products across tactical and strategic layers as well,” Rastogi told us.

LogiNext

Businesses don’t only need to make deliveries, but also need to predict routes and expected time for completion. LogiNext’s model running on AI-based algorithms predicts location-based decisions and automates the delivery processes like route planning, ETA calculation, traffic prediction and also manages exceptions, notifications and the customer experience in real-time. The startup charges an annual fixed fee per unit across various business functions like order capturing, capacity management, dispatch, and analytics.

Founded in 2015 by Dhruvil Sanghvi and Manisha Raisinghani, LogiNext has a global physical presence in 5 countries and users in 40 countries. It currently has 100 live enterprise customers and 50 customers are being on-boarded with 20% of them as fortune 500 companies. The startup is headquartered at Fremont, California and official filings accessed through Toflr state that the startup registered revenue of INR 15.43 Cr. as on FY19.

“The logistics sector has realised the importance of technology and has started embracing the fact that digital transformation is the only way ahead. However, that becomes the biggest challenge too as these folks have followed an age-old orthodox way of running their business and driving mindset change becomes very challenging while onboarding these organizations,” the startup told Inc42.

For 2020, LogiNext is looking to build and offer the world’s first enterprise map which allows customers to build their own workflows on top of it.

Shipsy

Most logistics platforms nowadays rely heavily on data and Shipsy uses data to support businesses in planning and reducing logistics costs. Founded in 2015 by Soham Chokshi and Dhruv Agrawal, Shipsy has customers in Dubai, Saudi Arabia, Southeast Asia, and North Africa and across various industries ranging from petrochemical, steel manufacturing, rice export, brick, and mortar retailers among others.

On industry challenges and strengths, cofounder Soham Chokshi told Inc42 that India’s low digitisation quotient in logistics acts as both an opportunity as well as a challenge. While it stands as an advantage to save costs, changing the mindsets of businesses to adopt digital tools are the biggest challenge.

For 2020, the startup plans to launch an intuitive and fully integrate-able shipment execution module, invoicing module, mobile applications along with financing and insurance support for shippers and forwarders.

TagBox

Securing goods and products in transit is a key challenge for ecommerce and supply chain businesses. Founded in 2016, TagBox helps customers cost-effectively and reliably ‘tag’ a product, supply chain shipment, monitor its health in real-time, and ensure that shipment quality is not compromised.

The Bengaluru-headquartered company’s BoxLens platform combines an IoT based real-time and granular sensing to monitor temperature, humidity, shock, light, energy, and location with machine learning-driven predictive insights to identify excursion, theft or damage risk and help in better planning for the supply chain.

Founded by Adarsh Kumar, Sameer Singh, and Saumitra Singh, TagBox plans to focus on providing thermal-vision powered quality and traceability solutions for cloud kitchens in the future. In addition, solutions for traceability in factory production environments (yard management, assembly line) are also in the pipeline.

“Customers see benefits like improvement in temperature compliance, reduction in (perishable) product spoilage and fragile goods damage, 100% SKU or batch traceability, reduction in delays and TAT, improvements in process metrics like loading/unloading time and complete visibility of supply chain assets like bags, boxes, and pallets,” cofounder Saumitra Singh said.

In terms of opportunity, Singh told Inc42 that ecommerce is a revolution for the logistics industry as it has created tremendous opportunities and new business models for the logistics sector. “We believe modern trade still has a lot of potential growth, especially in segments like diagnostics, e-pharma, food-delivery,” he added.

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The logistics tech startups are selected for the Startup Watchlist based on editorial criteria as well as the recent funding, stage, growth or scale achieved in the preceding year and how it has differentiated itself or its model in a competitive market.