While tech startups have explored areas such as last-mile delivery, drivers work life and tracking of shipments in the logistics space, Jaipur-based startup FLEECA focuses on the thing which makes the whole industry possible — the tyre. The company has identified the dependency of the logistics industry on the tyre and has created its own niche in the logistics market.
The company, which recently closed Pre-Series A funding round from Rajasthan venture capital firm, Innovana Thinklabs Ltd, offers multiple services including tyre-as-a-service, inspection and retread across the tyre-management sector in seven northern across cities including Mumbai, Nagpur, Delhi/NCR, Bhopal, Surat, Agra, Gwalior and more.
The startup said it will use the fresh funds to further develop its product, set up the marketing and sales team along with an eye on expansion pan-India.
“In addition to the investment, the investors will be supporting us as mentors and will also be providing us required support to scale up including infrastructure, market linkages to name a few,” founder and CEO Tikam Chand Jain told Inc42. Jain set up the company in 2016 along with Lokesh Sharma.
India’s logistics sector has been on an exponential rise with a touch of technology trying to revive the important yet stagnant and unorganised market. According to a report by investment bank Avendus Capital, the logistics tech market is expected to surge to $9.6 Bn (INR 69,044 Cr) by 2020.
Why And How Is FLEECA Taking Care Of Tyres?
After working with Sriram group companies for almost eight years, Jain began his entrepreneurship stint with a focus on Software-as-a-Service (SaaS) logistics solutions in 2013. However, when he met transporters, he discovered the high cost of managing tyres and the lack of management of this essential part of the logistics industry.
This prompted him to deep dive in the tyre-world tirelessly and he came up a solution to test the condition of a tyre and provide preventive care methods. By installing RFID (radio frequency identification) tyre tags to track the mileage of a tyre in its entire lifecycle, and a microchip to store the tyre’s unique ID, which is linked to the vehicle identification number, FLEECA could keep track of wear and tear on the tyre.
The chip can also store information on when and where the tyre was made, its maximum inflation pressure, size, etc.
Jain explained that when FLEECA inspects a truck tyre, it charges $0.27 (INR 20) for each tyre and helps transporters with preventive care methods. The next step for the company is to provide retreading of the damaged tyre.
Breaking down the economics, he said that a new tyre costs $250 (INR 18,000) with which it runs 80K kms, and once a tyre is retread for $27.8-$41.7 (INR 2000-3000) it runs an additional 50K kms, increasing cost efficiency and product longevity.
FLEECA also provides tyre-as-a-service, where it takes up end-to-end responsibility of taking care of the tyre fleet along with managing any damage on the run. Tyre-as-a-service begins with the selection of tyre depending on load, road conditions, vehicle type and axle position followed by inspection, repair and maintenance and more.
To follow this on the run inspection of management, Jain said that they plan to set up FLEECA centres at every 200 kms across India. Currently, eight such centres are operational across Jaipur, Bhopal, Kota and other locations.
With a team of 30, Jain and Sharma are also looking to leverage next-gen technology for its 25 customers including Ekta Enterprises among others.
The company is already working on an artificial intelligence-based product to put to use the data it has collected from the 2,000 tyres it has already deployed.
“AI-based platform will use data to give the analysis of best tyres, how to use them, which tyre suits what route, what tyre can be retread and much more,” Jain said.
The scalability of the niche market FLEECA has focused on is also tested with the growth the company has seen in its revenue since its first year of operations. After earning $5,560 (INR 4 Lakh) in its first year, the company earned $58,396 (INR 42 Lakh) in FY17-18 and has already recorded revenue of $361.5K (INR 2.6 Cr) in three-quarters of FY18-19.
FLEECA also attained break-even recently and is now eyeing exponential growth to further strengthen its presence in the country.
Rajasthan: Nurturer To Innovation And Ideas
FLEECA is just one of the success stories from the iStart programme. Started by the Rajasthan government, iStart, incorporates a single-window platform for startups offering a host of relevant information and benefits to facilitate their entry into the ecosystem.
Launched in November 2017, iStart has enrolled more than 750 startups till May 2018. With the Department of Industrial Policy and Promotion (DIPP) state ranking framework in place, state governments across India are aggressively making all possible moves to nurture their startup ecosystems.
With the launch of the Bhamashah TechnoHub Incubator, which aims to incubate 700 startups, and the Bhamashah Startup Promotion Fund of $77.3 Mn (INR 500 Cr), iStart has helped the state government achieve the advancement of the state, both economically and technologically.