Roadrunnr, a hyper local logistics provider, has chosen to go the B2B route to access the demand that exists in the Indian market. At present, it operates in Bengaluru, New Delhi, Gurgaon and Mumbai and aims to reach five new cities in India in the near future…
It’s the season to be in the hyper local on demand delivery space. TinyOwl, BigBasket and Grofers are just some of the names of nascent companies whose business models have impressed investors to bring in the big bucks. One of the emerging players in this scene is Roadrunnr, a hyperlocal logistics startup, whose main differentiator is the fact that its business model is strictly B2B. At present, the company works with food delivery companies such as Bhukkad, PizzaStop, TinyOwl and Grabeat and more in Bengaluru and has also spread out to New Delhi, Gurgaon and Mumbai. It’s order numbers have exceeded 1,500 orders per day and is increasing on a near daily basis.
We operate on an asset light model without any hubs and warehouses. Our technology platform drives the routing optimisation and hence we are able to handle time critical deliveries in a seamless way.
Tracing back to the point of business ideation Roadrunnr’s co-founder Mohit Kumar says, “ Point-to-point deliveries were done using hubs and sub-optimal routing. This made the cost of logistics pretty high and that prohibited small businesses from engaging in logistics,” he says while adding that this inspired Roadrunnr to solve point-to-point logistics for small businesses. And so, in 2015, Kumar along with Arpit Dave, established Bengaluru-based Roadrunnr. Interestingly, Dave and Kumar are ex-Flipkart employees and the duo credit this work experience for teaching them valuable lessons on handling scale and large projects that require coordination amidst multiple teams.
In June this year, Roadrunnr received its Series A to the tune of US $11 million from Sequoia Capital, Nexus Venture Partners and Blume Ventures. The company plans on using this towards technology enhancement and furthering its delivery network across the nation.
Arriving at a model
Unlike most other startups operating in this space Roadrunnr chose to go the B2B route to access all of the demand that exists in the market. “For example, if we on-boarded restaurants exclusively, we would only have access to their calls whereas this allows us to access 100 per cent of the demand out there,” explains Kumar. Roadrunnr’s focus has been building delivery strength and this seemed to be the optimum way to grow business. Going B2B has also allowed the company to partner with multiple businesses across segments such as restaurants, grocery stores, pharmacies, courier companies, laundry services and e-commerce companies. “We charge a delivery fee to the merchant based on the volume or the weight of the package and not the value. We charge Rs. 60 per delivery and there are no other charges and merchants can pay as they go,” shares Kumar. Importantly, Roadrunnr holds prepaid accounts with its merchants and ensures that it remits cash on the same day it is collected and this is significant as it partners with smaller businesses for whom a holdup in working capital can prove difficult. “We do the same for much larger merchants, such as e-commerce companies, irrespective of the size of order and collection,” says Kumar. As for its delivery modes, merchants can choose between demand delivery which ensures delivery within half-hour and scheduled delivery which happens within 24 hours.
Building a team
One of the key challenges for Roadrunnr was to navigate an unorganised market to hire delivery personnel. Currently, the company employs over 3,000 delivery personnel. “We have a part time model where the delivery boy can just work with us for three to four hours per day and make good money. That helps us tap a large pool of delivery boys,” says Kumar while adding that this model also speeds up hiring for the company. The company also puts its delivery personnel through in-house training which includes classroom sessions and on-ground drills. However, things got easier when it came to hiring for the technology team, shares Kumar. “We don’t work with a recruiter, in fact, Arpit and I have a solid network through which we just put the word out and meet with people who are interested in hearing our pitch,” explains Kumar. This seems to have worked out well for Roadrunnr as the company has been successful in hiring individuals from companies such as Flipkart, Ola Cabs, Uber and Amazon. Kumar quickly adds that the founders are very conscious of hiring only those who share their passion for growing Roadrunnr’s model. Interestingly, the company manages a very lean technology team that comprises nine individuals. “Our overall workforce is about 85-people strong and we are adding to that number every day,” says Kumar.
In this competitive hyper local logistics space where several startups have mushroomed over the last few years, Kumar believes that Roadrunnr enjoys a few salient advantages. “We operate on an asset light model without any hubs and warehouses. Our technology platform drives the routing optimisation and hence we are able to handle time critical deliveries in a seamless way,” he states. The company’s founding team is also confident that it can crack the delivery code in four other cities, namely, Chandigarh, Ahmadabad, Hyderabad and Pune over the next month. And that is just the start of bigger things to come. “Over the next two years, Roadrunnr will own the largest fleet of on demand carriers in India and will be the most affordable service for small merchants,” concludes Kumar, on a very positive note.
Founders: Mohit Kumar and Arpit Dave
Industry: Hyperlocal delivery logistics
Investors: Sequoia Capital, Nexus Venture Partners and Blume Ventures
Investment: US$ 11 million