Mahindra Group-owned logistics marketplace SmartShift has announced an intent to merge with Porter by Resfeber Labs, a tech-enabled logistics solutions provider in the goods transportation space. This merger is subject to corporate and regulatory approvals.
As per the official statement, the merged entity, which would be called Mahindra SmartShift, will receive an investment of $10 Mn (INR 65 Cr) from Mahindra. The merger is geared towards helping both SmartShift and Porter create a pan India presence in the growing shared mobility space.
Commenting on the development, Anish Shah, Chairman of SmartShift said, “Since its inception, SmartShift has become the preferred choice for transporters and customers alike by consistently delivering on its customer value proposition of enhancing the spirit of entrepreneurship amongst transporters and enabling an improved business productivity amongst its customers”
“Being part of our diversified group while working on a young entrepreneurship culture has been our mantra for SmartShift. Our new association with Porter will be a win-win for both companies and will definitely cement our position in the ever-growing shared mobility space,” Shah added.
Post the merger, the two companies will continue to service their respective customers and partner-drivers, in order to optimise operational efficiency.
As part of the deal, Porter co-founder Pranav Goel will serve as the CEO of Mahindra SmartShift, while the startup’s current chief executive Kausalya Nandakumar will act as the interim Co-CEO to ensure smooth transition and integration of both the companies.
Speaking on the merger with Mahindra’s SmartShift, Goel stated, “Porter has serviced more than 200K customers and more than 10,000+ partner-drivers on the platform. This is a strong testament of the platform’s seamless customer and partner-driver experience and our association with Mahindra will take it to the next level. The synergies between our business modules are evident and this association with Mahindra will further build on the trust of our stakeholders.”
The move is in line with Mahindra’s aim to invest in the shared mobility space as a part of its strategy to promote and participate in sustainable mobility solutions, including promoting load aggregation digital platforms, said Shah.
About Porter: 200K Customers, 10,000+ Partner Drivers
Owned and operated by Resfeber Labs, Porter was founded in 2014 by IIT alumni Pranav Goel, Uttam Digga and Vikas Chaudhary. The Mumbai-based startup is striving to provide economical, efficient and reliable logistics solutions to its customers, while empowering partnered drivers, by utilising technology.
At present, Porter has 10000+ vehicles on its platform and has done 1.5 Mn deliveries in the last three years.
The company currently operates in Delhi, Mumbai, Bangalore, Chennai and Hyderabad and plans to expand to 15 other cities including Pune, Kolkata, Ahmedabad, Chandigarh, Jaipur, Lucknow and Coimbatore over the next few years.
The company is backed by Sequoia and Kae capital. If the merger deal with Mahindra-owned SmartShift goes through, Porter’s total fundraise so far will have crossed $20 Mn, co-founder Pranav Goel stated in the official release.
SmartShift By Mahindra: An Overview
Launched in 2015, SmartShift is a logistics marketplace by automotive giant Mahindra. In fact, SmartShift was the first digital mobility startup incubated under the aegis of the Mahindra Group.
The startup specialises in providing small commercial vehicles for intra-city first and last-mile requirements. It currently acts as an exchange platform for cargo owners and transporters, enabling them to work with each other.
With its intuitive reverse auctioning technology platform and real-time ability to track vehicles, SmartShift aims to make daily logistics requirements of SMEs at least 30% more efficient. For its transporter partners, the company currently offers access to its mobile-based platform as well as efficient pricing through return trips.
Currently present in more than 1600 pin codes across 10 cities, SmartShift aims to disrupt the unorganised cargo transportation segment with a focus on community building.
Encashing The Growing Potential Of The Logistics Sector
The Indian logistics industry is forecasted to touch $307 Bn by 2020. Currently valued at $130 Bn, around 35%-40% of the market is in the intra-city space. It is also estimated that 1.8 Mn small commercial vehicles complete millions of transactions daily, across the country.
As per Inc42 DataLabs Funding Report 2017, transport-tech startups raised $1.65 Bn funding across 37 deals. In H1 2017, in terms of the amount being invested, transport and logistics took the third and fourth spots, respectively, with $528 Mn and $271 Mn in funding. In total, the logistics startups received over $271 Mn funding across 18 deals in H1 2017.
Apart from small ticket size fundings ranging between $1 Mn -$10 Mn, there are startups like BlackBuck which secured over $90 Mn funding this year. Then there is Rivigo, which after raising $75 Mn in November 2016, has now become a potential contender to enter the Indian unicorn club.
Mahindra’s decision to merge its SmartShift business with Porter is likely geared towards encashing the growing potential of the country’s logistics market.