Mumbai-based logistics analytics firm, LogiNext, has closed a $10 Mn Series A round of funding from mcommerce platform, Paytm. The proceeds will go towards bringing greater efficiencies to its delivery vertical.
Kiran Vasireddy , Senior VP (business), Paytm confirmed the development and said, “The simple rationale behind this investment is that we are building a logistics cloud for our partners which will be aided by LogiNext. Bigger companies have the required tech talent to build on their logistics capabilities but it is a challenge for smaller companies. LogiNext will enable us to address this concern for our partners.
We asked Dhruvil why did he go for an entrepreneur backing his startup rather than a VC firm, to which he said, “Entrepreneurs understand the business and challenges involved in a much better way than VC firms. Being an entrepreneur himself I can say that Vijay (Paytm) will be better able to support us in a much better way than a VC firm.”
LogiNext, founded by Dhruvil Sanghvi and Manisha Raisinghani in 2014, was a part of the first batch of GenNext Innovation Hub, an incubator set up by the Mukesh Ambani-led Reliance Industries along with Microsoft Ventures. The firm employs smart technology to help the companies to avoid postponements, incorporate transparency, and perform real-time tracking to get insights about their moving assets, distribution networks and supply chain. The startup serves medium and large scale enterprises. As of April, LogiNext had 15 paying clients and was doing pilots for 25 firms, including Flipkart and Snapdeal.
Sanjay Mehta, who is an investor in LogiNext said, “For the series A round, we were looking for a partner who would add value to LogiNext’s in terms of data analytics. In this respect, Paytm was a perfect fit as they understand the market. Also they have given a free hand to LogiNext to work with other on-demand companies. This deal will enable LogiNext to almost become like the Google of logistics.”
Earlier in April, Loginext had received seed funding of $500K from Indian Angel Network.
The investment is a part of Paytm’s plan to invest about $150 Mn in over a dozen startups. Paytm’s investment in early-stage startups would be in the $10-15 Mn range while a select few may receive funds in larger amounts as well. Last month, the company had announced that it had readied a $500 Mn war chest to battle out with the other players in the space. The company had kept aside about $200 Mn in cash and the remaining $300 Mn infusion would be through equity. About $50 Mn was set aside for investing in logistics and warehousing.
Paytm’s investment in LogiNext is a win-win situation for the mcommerce giant as it will enable it to gainfully leverage LogiNext’s technology of real time tracking and logistics analytics. This will enable it to spot delivery bottlenecks and address pain points in its distribution networks and supply chain. India’s ecommerce space has grown rapidly in the last few years. Amid this high competition environment, ecommerce firms are aiming to reduce delivery time to enrich customer’s experience.
Kiran also mentioned that, as a part of Paytm’s investment strategy, the company would be looking to invest in about 10-15 tech startups in the next 18 months.
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