The Inc42 & AWS series — Scaling From 1 To 10 — looks at logistics startup Locus’ growth story
Locus offers a platform automates supply chain and logistics operations for businesses
Its clients include BigBasket, Bluedart, Myntra, Urban Ladder, Lenskart, 1mg among others
The Inc42 & AWS series — Scaling From 1 To 10 — continues with a closer look at Indian logistics tech startup, Locus.
Managing supply chain has been an issue since time immemorial. Ancient Chinese military general and philosopher Sun Tzu once said, ‘The line between disorder and order lies in logistics…’ and since then efforts have been pretty much ongoing to make sure what leaves one place arrives at the next in the best condition possible and in the quickest time.
Technology has now made it easier to bridge the gap and have visibility at each stage. Delhivery, Blackbuck, Rivigo, Locus and Loginext — such logistics startups have literally changed the face of the sector in India and globally. Blending technology, innovation and new company culture into this otherwise a largely perceived brick and mortar game.
As part of the Inc42 & AWS series — Scaling From 1 To 10 — we caught up with Jamsheed Kamardeen – VP of Engineering, Locus to understand the journey of the tech platform, the company’s work culture, growth story and more.
From Dispatcher, Motion Tracker, Intellisort to FieldPro, Locus offers a variety of services, preferably a platform that claims to automate a major chunk of supply chain process. It’s not just another logistics automation startup, Kamardeen said.
“Unlike others, we are not providing a platform — a dashboard — for people to make a decision, but we are providing a platform that makes the decision. This is a huge market differentiator.”
Kamardeen says businesses used to have a slow-moving planning division to decide which truck will go where. This humongous task was not scalable because of the number of human resources it would need without automation, but with Locus businesses have witnessed a 10-20x increase in their daily efficiency, Kamardeen claims. “For instance, if earlier a truck used to complete five trips a day. Now, they are able to complete almost 15 trips a day.”
The Locus Journey Begins
Around four years ago, Kamardeen was still pursuing a master’s degree in Information Security at an engineering college in Coimbatore and was looking to do something exciting which could make an impact. That’s when he saw a Facebook post on a group called ‘Bengaluru Startup Connect’ by Locus founder and CEO Nishith Rastogi.
“The perks were amazing. There was accommodation, free food plus the office was pet-friendly. This prompted me to connect with the founders,” Kamardeen recalled.
It was around June 2015, when he went to meet the founders Rastogi and Geet Garg. They were working from a 2BHK flat in an apartment on the outskirts of Bengaluru. Besides them, there was an intern, who is now a full term employee at Locus.
“Having developed a couple of apps during my masters which had fetched over 100K subscribers, I realised that these people are not simply riding the startup wave but have something unique to share. The interview itself was of seven hours. By the end of the interview, I was totally into it that this is what I should be doing,” said Kamardeen.
It was not Locus then, recalls Kamardeen. After the tragic and horrifying Nirbhaya episode in Delhi, both founders wanted to do something to improve women’s safety. And, that’s how they came up with the RideSafe app. The app was different from the other plethora of safety apps. The unique capability of RideSafe was that it had a route deviation detection system in place.
“Let’s say you’re going to the airport. The app’s backend engine keeps tracking the route and besides considering the real-time traffic data, it proactively monitors the traveller’s route whether the deviation is a good deviation or a bad deviation.”
Riding From RideSafe To Locus
Once RideSafe was out there. The founders came to know that a coffee delivery service company in Bengaluru was using RideSafe to track their delivery boys. Even though the app was aimed at a safer ride for women, it was an interesting application. The coffee company used RideSafe to ensure that their delivery boys are using the right route and are not wasting unnecessary time on the way. So, if the driver is stopping somewhere abnormally, where there’s no traffic, this means there is something wrong.
“This led us to decode the root-cause problems of logistics that was not just about tracking the delivery boys but was deep-rooted because humans were making all the decisions every time. For instance, it’s the store manager who decides which delivery boy needs to pick up what delivery. This could go both ways,” he said.
“So, we took upon ourselves to build an intelligence backed API to automate the entire process,” he added.
Around 2015, was a very interesting time for the logistics market. With Uber getting popular in the country, a lot of startups mushroomed with the ideas of implementing the ‘Uber tech’ to solve issues pertaining to modern hyperlocal logistics, on-demand logistics etc.
“The expectations changed. People no longer expect goods to be delivered in a week or month time. Locus was launched in July 2015 with one client,” said Kamardeen.
The Locus Advantage
The two solutions that Locus came up with were MotionTrack and Dispatcher. If MotionTrack maps everything about the developments on the field which include how many tasks are pending and which task will take how much time plus more related information, the AI-based RO solution, Dispatcher, provides automated route planning after accounting for multiple real-life constraints and distribution models.
“At any point in time, Locus knows where the delivery boys are and how much time they might take to complete the trip and hence accordingly it assigns the next delivery. At the same time, it could also club other tasks such as collecting goods from a nearby location. Further, you have customers’ preferred time slots for deliveries which Locus has to consider.”
Locus’ proprietary algorithm and routing engine have been patented and the company is able to provide customised solutions, depending on the client. “Interestingly, the Locus API could do it on a huge scale as well. We have clients like BigBasket, Lenskart implementing it on a large scale,” he added.
Logistics has its own nuances, Kamardeen argued. For instance, in the case of Urban Ladder, the transaction time is not the same as in the case of other deliverables. Urban Ladder expects the delivery person to install the pieces of furniture too. “A lot of our competitors focus on building a management interface or dashboard which means startups need to have people to manage it. However, we didn’t want people to make the decision.”
That’s because it’s not just about sending or delivering goods. “Lenskart needs to send its opticians to the client’s locations. Some companies need more than delivery agents; they need people to install products. So, there is a variety of services that we cater to.”
Besides Dispatcher and MotionTrack, Locus has added two more products — Intelisort and FieldPro — over the course of the last few months. Leading logistics player BlueDart is currently using Intellisort which sorts items automatically for separate shipments, Kamardeen added.
Meeting Logistics Market Demand And Challenges
India’s logistics map is not organised. “It’s very hard to find the exact location through mapping. We have a separate team just working on Geocoding, converting addresses into latitude and longitude.”
Further, the addresses in India are written differently than how the West and other countries write their addresses. The languages also differ. He said, “We have a team to decode theses address issues. How they are written in Taiwan for example, or other countries.”
Not exactly a challenge, but there are varying parameters to consider while writing the tech architecture, he said. “For instance, the fleet can be a mix of bikes, trucks, mini trucks etc. Further, some of these could be on the lease, and therefore, the priority must be given to own vehicles first. The system needs to understand all these factors.”
The more variables brought into the system, the better it understands and executes. Locus optimises the shipments as well as their delivery routes. This reduces a lot of carbon footprint.
The Cloud Helps Deliver
Naturally, these algorithms and the routing engine would not be very useful for companies if the data is not updated in real-time. For example, a customer needs to see the exact location of its entire fleet and needs to be able to make decisions on the fly. Logistics companies cannot enable such real-time features without cloud computing, which improves user experience, service performance and uptime. This is crucial for on-the-go tracking.
Locus went with AWS as the provider as founders Rastogi and Geet Garg had experience working at Amazon as software developers and introductions became easier due to the people they continued being in touch with.
Kamardeen clarified, “From day one, we have adopted AWS as cloud partner. AWS is very different from other cloud services companies in the market. Many of the cloud companies earlier used to give just a server somewhere else. AWS offerings are much more than that. I firmly believe, without AWS we would have struggled a lot.”
One of the freedoms that cloud computing has brought startups is the ability to focus on innovation and not spend crucial resources on maintaining the tech platform and the infrastructure. “Over time, we tried other cloud services as well but they are miles behind AWS. We scaled up by manifold in the first three years without having any infrastructure operations team. AWS was there to take care of it and we utilised our full resources to just focus on the core part,” he added particularly pointing out the provider’s support team as an advantage.
Work Culture At Locus
Those outside the tech industry might have notions of what the work culture at a tech startup is like. But often the reality is quite different from the perception of bean bags and informal teams and floating desks.
For Kamardeen, the mix of people at Locus makes it a fun place to be in. “At Locus, we have people from different parts of the country, with different backgrounds. Some are like PhDs in Physics and Biology. They all work in different teams yet together. We take a lot of pride in hiring smart people. Locus also gives all the freedom to its employees that they want.”
According to him, Locus look for the below abilities while hiring:
- Person’s ability to comprehend
- Ability to understand, solve a particular problem
- Research and analytical skills
- Subject matter expertise
“We are tech agnostic, language agnostic. As we believe a really smart person can pick up this stuff in a few weeks. The best thing that we believe we provide is the ability to experiment over here. For instance, joined here as an Android developer. However, I have worked on iOS apps development, I have worked backend, frontend operations.”
Locus understands the human nature of making mistakes and accept the fact, he added,
We don’t even keep count of how many leaves employees take as we consider other KPIs. It doesn’t even matter how many leaves they take, how many hours they work from the office or from home. We don’t have any approval process for leaves even. One just needs to plan and communicate it properly to the team.
Delivering Efficiencies Globally
Having raised Series B funding worth $22 Mn earlier this year, Locus has plans to expand its base across South-East Asia and North American markets. As part of the plan, the company recently inaugurated its office Jakarta.
In June 2018, the company 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.
“We are now working on expanding and customising our solutions in accordance with these geographies. We are also working with the market leaders to meet the challenges, these geographies may offer.”
Besides India, “Southeast Asia is witnessing a huge commercial boom. North America is comparatively an established market. However, logistics has always been a challenge in all the markets. It’s an age-old problem plus, it is also due to the uniqueness of our solutions that we find a big market across these country-markets,” he said.
Opportunity And Challenges Ahead
While the global logistics market, according to ResearchAnMarkets, reached a value of $4,730 Bn in 2018, and is projected to reach a value of $ 6,300 Bn by 2024, registering a CAGR of 4.9% during 2019-2024, according to MarketsandMarkets, the global logistics automation market accounted for $42.8 Bn in 2017 and is expected to reach $126.53 Bn by 2026 growing at a CAGR of 12.8% during the forecast period.
In India, however, there lies a huge untapped market ahead. The market size of the Indian logistics sector shall hit $215 Bn by 2020, logging 10.5% CAGR, says IBEF. Logistics also generates millions of employment in the country. Currently, employing 22 Mn people, it is estimated to surge to 40 Mn by 2020.
Undoubtedly, India offers a huge untapped market, however, amid a slowdown, startups along with the conventional players might feel the heat in the short term.
While steps like GST and demonetisation had negatively impacted the Indian logistics sector to some extent, the recent economic slowdown has also hampered the growth and eaten into the already relatively thin margins in logistics.
However, startups with their technology and innovative solutions have always tapped these challenges which conventional players more-often are unable to address, as opportunities. While GST and demonetisation saw the rise in digitisation, a friendly market environment for startups, their automated solutions have brought the cost down while scaling up the entire system.