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Era of Hyperlocal In India: What Is A Hyperlocal Delivery Startup?

Era of Hyperlocal In India: What Is A Hyperlocal Delivery Startup?

Investment in hyperlocal delivery startups on the rise across categories and verticals 

The likes of Amazon and Flipkart have also joined the hyperlocal delivery race in India 

What are the factors that will determine success in the tight hyperlocal delivery and services market? 

It’s the era of instant, and hyperlocal delivery services and startups in India are capitalising on the wave of millennials who want things delivered at their doorsteps at the tap of a button. Hyperlocal refers to any localised area such as a neighbourhood, a city block, or even the whole city. So a hyperlocal startup is one that is in the business of supporting other businesses in last-mile delivery such as Locus or Shadowfax or in delivery of products through a marketplace-like platform such as Dunzo or Swiggy with Swiggy Go, or any of the dozens of other startups operating in this space in the India market.

Range of Hyperlocal Services

For the sake of simplicity, hyperlocal is often only used to describe startups that deliver goods from local stores to end consumers through a fleet of delivery agents.

Besides delivering products listed by stores and retailers, hyperlocal apps also allow consumers to place generic orders which can be fulfilled from any store. Additionally, some hyperlocal startups help consumers fulfil smaller tasks such as sending parcels from one location in the city to the other.

Whether it’s food, groceries, household essentials or even medicines, many startups in India have embraced hyperlocal deliveries with gusto. Here are some of the more prominent hyperlocal delivery and services startups in India:

  1. Dunzo
  2. Swiggy (Swiggy Go)
  3. Housejoy
  4. UrbanClap
  5. Zomato
  6. BigBasket
  7. Grofers
  8. Paytm Mall
  9. Milkbasket
  10. 1mg

Hyperlocal Startups In India

Today, with the blink of an eye, consumers have at their disposal a plethora of hyperlocal startup services to choose from for a range of use-cases — while there are UrbanClap and Housejoy for home services, there are Swiggy and Zomato for on-demand food delivery, then there are specific players like Swiggy Go and Dunzo which fulfil daily requirements like purchasing groceries etc.

Additionally, with improved logistics startups such as BigBasket and Grofers have been able to deliver within a matter of hours from local stores. Medicine delivery startups such as 1mg, Medlife and others are solving the problem of access to medicines and other healthcare supplements in non-urban areas as well.

StartupVerticalHQFoundersKey InvestorsFunding Till Date
DunzoHyperlocal delivery and courierBengaluruAnkur Aggarwal, Dalvir Suri, Mukund Jha, Kabeer BiswasDeep Kalra, Google, Blume Ventures$75.7 Mn
Swiggy (Swiggy Go)Food and hyperlocal deliveryBengaluruNandan Reddy, Rahul Jaimini, Sriharsha MajetyDST Global, Naspers, Bessemer Venture Partners, Norwest Venture Partners, Accel, SAIF Partners$1.27 Bn
HousejoyHyperlocal home servicesBengaluruSaran ChatterjeeMatrix Partners, Vertex Ventures, Amazon$30.2 Mn
UrbanClapHyperlocal home servicesDelhi NCRAbhiraj Singh Bhal, Bike Doctor, Raghav Chandra, Varun KhaitanVy Capital, Tiger Global, Steadview Capital, SAB Holdings, Udhyam Learning Foundation$185 Mn
ZomatoFood deliveryDelhi NCRDeepinder Goyal, Pankaj ChaddahSequoia Capital, InfoEdge, Temasek Holdings, Ant Financial, Vy Capital, Info Edge$775.6 Mn
BigBasketGrocery deliveryBengaluruAbhinay Choudhari, Hari Menon, Vipul Parekh, VS SudhakarAlibaba Group, Helion Venture Partners, Paytm Mall, Helion Venture Partners, Bessemer Venture Partners, LionRock Capital, Abraaj Group$1.02 Bn
GrofersGrocery deliveryDelhi NCRAlbinder Dhindsa, Saurabh KumarSoftBank, Sequoia Capital India, Tiger Global Management$500 Mn
1mgMedicine deliveryDelhi NCRPrashant Tandon, Vikas Chauhan, Gaurav AgarwalSequoia Capital, Omidyar Network, Kae Capital$167 Mn

And it’s not only these players who operate pan-India, the hyperlocal ecosystem has plenty of city-specific startups as well. Hyderabad-based Jigydi is a hyperlocal services provider in the vein of UrbanClap, but it has localised operations which help it tap a network on underserved vendors and service providers that may have escaped the net. It’s also slowly expanding its services to other cities near delivery and has already started 2-hour grocery delivery. Flipkart has also begun delivering groceries, which it has gradually expanded over 2019.

Indian Hyperlocal Startup Ecosystem Growth

The rise of hyperlocal delivery startups can be traced back to 2015 when there was a sudden boom and the hyperlocal market is estimated to reach $344 Mn by 2020. According to Datalabs by Inc42, late-stage investments into hyperlocal startups emerged as the driving force for the rise in late-stage funding (79.59% of the total funding) in the consumer services segment.

The biggest reason for the success of these startups is the lightning-quick speed at which they are able to facilitate a consumer’s request due to the improvements in the logistics infrastructure in India.

Not only that, the fact that consumers have at their disposal a world of choice which has made it a tight market but where customer loyalty is always at stake. Indian consumers have also become accustomed to buying products online and getting them instantly, which means there’s always room for services to streamline hyperlocal delivery and get the edge, which means hyperlocal services have a high innovation quotient and also add new features regularly to keep users coming back.

All this has fuelled the demand for capital and with their burgeoning user base, hyperlocal startups are able to convince investors of the value of this sector and the growing addressable base. Hyperlocal startups have only just begun and as more and more stores come online, there will be other problems to solve, such as minimising the human inefficiency in delivery and reducing customer churn rate. The hyperlocal delivery startups that solve these major issues will have a better chance of winning the race.

With inputs from Ankita Sahni, Nikhil Subramaniam