Three segments i.e. Hyperlocal delivery, food delivery and auto booking have been making a lot of buzz in the Indian startup ecosystem since past few months. Startup in each of these segment have not only been launched but have also raised big funding rounds. The market size that these segments offer have been the major reason for sudden uptake. Chandigarh-based Jugnoo is one startup which is trying to tap all these three segments through the use of auto rickshaws.
Jugnoo is a hyperlocal marketplace to provide everything on-demand using auto rickshaws as a logistics engine for A2B transport and Value Added Deliveries. “We aim to utilize auto rickshaws as logistic partners as they are available easily, are quicker and cheaper mode and in abundance in cities. They are the vehicles of masses – helping achieve economies of scale by offering cheaper but fast transport,” says Samar Singla, CEO and founder.
The startup currently targeting the above mentioned three segments by utilizing auto and has launched apps to manage all these Jugnoo (Nov 2014), Jugnoo Meals (Feb 2015) and Jugnoo Fatafat (April 2015).
- Jugnoo lets you book an auto instantaneously or schedule a pick up for later which is a $10 Bn market.
- Jugnoo Meals delivers fresh, home-cooked affordable meals at your doorstep, which is a $20 Bn market.
- Jugnoo Fatafat, lets users order anything from anywhere for free. The best part of Jugnoo Fatafat is its custom order feature, where in case you can’t find the store you are looking for, you can just place a custom order and it takes care of the rest. On-demand delivery is a $340 Bn market, which includes delivery of groceries and other goods.
Jugnoo has closed a seed round of $1 Mn from Rakesh Mathur (Junglee, Flywheel), Vikas Taneja (previous investments in Rapportive, PubNub, etc.) earlier this month.
On-demand delivery market is going to bring the next big disruption in the ecommerce segment. With everything set in place, the player who solves this piece is going to come out as a winner. There are a number of startups in this space that have attracted funding in last few weeks including Grofers, PepperTap, ZopNow, among others.
On the other side, auto booking is a segment which has also attracted a lot of attention after Ola had introduced auto booking on its platform. Uber and Taxiforsure also aggregates auto for consumer booking. Few months back, another startup Chalogekya had also raised funding and has just launched their app.
Jugnoo app for auto booking competes with the above said apps. “I don’t see Ola and Uber as competition, but in fact as a potential partner to Jugnoo due to our hyper local commerce model and availability of excess inventory,” he said. On the other side, players like ZopNow and Grofers can be potential partners for Jugnoo in on-demand delivery and companies like foodpanda, Tinyowl and Zomato in food delivery.
Samar further explained that Foodpanda and Zomato are mostly providing a technical platform for the restaurants where they prefer delivery being done by the restaurant itself. But recently, foodpanda has started making food delivery on behalf of restaurants. To optimize on delivery logistics, all such players can no actually partner with Jugnoo for their deliveries.
On the other side, he says, “Ola and Uber will have a natural inclination to push their cab services past just autos due to the ticket size. This makes the auto drivers feel insecure with such services. We have had a few cases where Ola auto drivers have come to us as they feel threatened working with them. With an ongoing constant fear among autos that cabs are eating their market share, Ola and Uber will find it better to partner with us rather than handling autos themselves.,”
- Average ticket size for auto rides is INR 80 (10% commission per transaction) and for on-demand delivery is INR 450. With addition of more and more categories, this number will increase up to 1.5x, per the company.
- Jugnoo has about 70k+ users, over 1,200 Transactions are done on daily basis, and has had 72,104 Total Transactions done so far using the platform.
- The startup is earning $1,510+ in Daily Revenue and currently gets 80% of revenue from auto bookings and rest from the delivery.
- The auto booking service is currently available in 4 cities i.e. Chandigarh, Ludhiana, Amritsar, and Jaipur (and launching one more city soon) but delivery is currently only available in Chandigarh. With launch of delivery service in other cities the startup foresees the revenue ratio from delivery services going upwards.
- The most ordered products usually come from restaurant deliveries and home cooked meals, followed by groceries. “People have already started expecting more in terms of service and even asking for professionals on our app,” said the company.
- Average delivery time varies between 20 to 40 minutes, which also includes the preparation time by the store from which order has to be picked up. The company already has secured relationships with 100 merchants and earns a commission that varies from 10% – 25% depending on the commodities they offer.
Currently, the Jugnoo is not focusing much on the profit margins but rather on providing quality service and expanding fast. “Margins is a piece that will come eventually. Merchants are already coming on-board themselves to get associated with Jugnoo – I am sure getting profit margins would be an easy task,” he added.
The company down the line is aiming to become the largest on-demand service in India in the next five years, where users will be able to find anything and everything. The company has a strong focus on product, which is also the core foundation of what it is doing. “All the products have been developed keeping scalability in mind. We have already expanded to 4 cities within 5 months of operations. There is still a lot to be done on the product side, but if someone asks me to move to Philippines or China tomorrow, we are all set to go!,” Samar said.
Jugnoo was founded by Samar Singla, CEO and founder, B.tech IIT Delhi and Chinmay Aggarwal, CTO and co-founder, B.Tech IIT Delhi in November 2014. The funds raised in this round will be utilized mainly for expansion across cities and growing our tech team for better product.
It’s great to see more and more young startups attempt to solve big problems in India. Although their growth has been impressive, it will be interesting to see how they’ll navigate in the market given the growing competition in the space. It’s quite impressive to see Jugnoo expanding so fast, but the question remains how well they’ll be able to focus on all the aspects together.