Logistics optimisation startup Locus has secured $22 Mn in a funding round led by New York-based hedge fund Falcon Edge, VC firm Tiger Global and its existing investors, a source privy to the development told Inc42.
The details around the funding round and fund allotment are yet to be disclosed.
However, according to MCA filings accessed by Inc42, Locus raised $2.26 Mn (INR 15.81 Cr) from existing investors Exfinity Technology Fund- Series II and Blume Ventures India Fund II, in two tranches in February and April. The round was routed via the private placement of compulsorily convertible debentures. In this round, Exfinity Technology Fund invested nearly INR 14 Cr in Locus. Although, it’s not clear whether this investment is part of the bigger $20 Mn funding round or not.
On reaching out, Locus cofounder and CEO Nishith Rastogi declined to comment.
Speculation about a possible fundraise by the company which has head offices in USA, Bengaluru and Mumbai was going on since last month. Both Tiger Global and Falcon Edge exploring an investment in Locus have been quoted in the media already.
The latest round takes the total funding of Locus to $26.75 Mn. In June 2018, the company had raised $4 Mn from Rocketship.vc, Recruit Strategic Partners, pi Ventures, and Hemendra Kothari of DSP Group. It also counts BeeNext, growX ventures, Manish Singhal, Bhupen Shah, Sanjay Mehta, Ankit Pruthi, Rajesh Ranavat, MD, Fung Capital among its investors.
Built on deep learning and proprietary algorithms, Locus allows enterprises to do algorithm-based route optimisation, real-time fleet tracking, insights and analytics, as well as automated shipment sorting and rider allocation. The startup works with clients in India, Singapore, Jakarta, Phoenix, and Vancouver.
It counts Indian startups, such as BigBasket, UrbanLadder, 1mg, Licious, Quikr, Lenskart among others in its clientele. The company claims to have brought a considerable reduction in dispatch planning time, sorting time, and operational costs for its client companies. In 2018, Locus was also featured among India’s most innovative startups’ list — 42Next by Inc42. The logistics startup was a part of Microsoft’s eighth accelerator batch in 2016.
Locus: Unpretentious Focus Leading The Way
Locus founders, BITS Pilani and IIT alumni — Nishith Rastogi and Geet Garg, started their entrepreneurial journey with PinChat, a location-based comment and conversation platform. Later they went on to build RideSafe — an app which could detect route deviations in real time, built for women to commute safely.
Related Article: Logistics Startup Locus Raises $4 Mn In Pre-series B Funding
However, they found that RideSafe’s technology could also be applied in tracking delivery fleets of foodtech companies, and that’s how Locus was launched in 2015 as an attempt to simplify logistics for enterprises using machine learning and artificial intelligence techniques.
Working on a pay-per-transaction model, with no overhead costs, Locus is currently offering automated logistics for enterprises in ecommerce, 3PL, home services, retail and CPG & FMCG.
Tracking The $215 Bn Indian Logistics Market
Inter-city logistics accounts for a massive 95% of road freight movement and by 2020, the logistics market in India is expected to be worth $215 Bn, as per an October 2018 report by CARE Ratings.
Globally, the route optimisation software market size is expected to grow from $2.95 Bn in 2018 to $5.07 Bn by 2023, at a CAGR of 11.4%. The major drivers of the market include the increasing use of logistics-specific solutions and declining hardware and connectivity costs.
Over the past few years, companies like Locus, BlackBuck, Rivigo, Delhivery, Shipsy, Assettrackr, LogiNext, DotZot have made tremendous strides in automating the last mile delivery processes.
According to H. Donald Ratliff, the executive director of Supply Chain & Logistics Institute, for most supply chain and logistics operations, there is an opportunity to reduce cost by 10% to 40% by making better decisions. And logistics startups are making this happen.
The investors’ growing confidence in the logistics sector is now creating better funding opportunities for logistics startups. According to Inc42 DataLabs’ annual funding report 2018, logistics startups pocketed $346.27 Mn funding in 2018, which is a 3.21% increase as compared to $335.49 Mn in 2017.
This was however trumped in 2019, when logistics startup BlackBuck raised $150 Mn in a Series D round, taking its pre-money valuation to $1.1 Bn.
Tiger Global And Falcon Edge’s Return To Form
Earlier, it was speculated that Tiger Global had lost its appetite for Indian startups after the several valuation ups-and-downs of the crown jewel of its Indian portfolio — Flipkart. However, after Walmart acquired the Indian ecommerce unicorn for $16 Bn, Tiger Global is now ready with a $3.75 Bn fund, determined to invest a significant portion in consumer internet, cloud computing, industry software as well as direct-to-consumer companies.
As far as Falcon Edge is concerned, the hedge fund is looking to increase its exposure nearly four times in the next 2-3 years in the Indian startup ecosystem. While startups like Bounce are in line for an investment, it has already invested millions of dollars in notable companies such as Ola, MadStreetDen (Vue.ai) and DailyHunt.
For both Falcon Edge and Tiger Global, the Locus investment highlights not just a renewed interest from foreign investors but also — much to the joy of India’s enterprise tech and deeptech startups — the willingness to back indigenously developed tech products.
Update 1: May 9, 2019, 22:29
An earlier version of this story mentioned incorrect head office location for Locus and fund size of Tiger Global as $3.5 Mn instead of $3.5 Bn. The same has corrected now.
Update 2: May 13, 2019, 13:45
Locus has issued a press release confirming the funding of $22 Mn. The article has been edited to reflect the official statement of the company.