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There is always this last-minute ruckus while you pack your bags to catch your flight for your friend’s wedding. You have to be at the airport in an hour and as the clock ticks away, panic reigns supreme. As you frantically cram the various ensembles you plan to wear for the chain of wedding functions, a horrid realization dawns upon you – you forgot to collect the suit from the tailor. There is absolutely no way for you to collect that suit now; you miss your flight in case you do, and you end up completely underdressed for the occasion.

In such situations, when you’re trapped between the devil and the deep blue sea, startups like Rapid TOTO can be a Godsend.

Founded by Aakash Kamra and Sachin Kanodia, Delhi-based Rapid TOTO is a logistics company that offers express delivery services to offline and online retailers, organisations and local consumers. For businesses, it offers pick and drop services for wide range of items, which includes parcels weighing less than 20 Kgs, documents and files, cheques, cash and even gadgets. On the consumer side, it delivers groceries, gifts, flowers and even food from restaurants. Rapid TOTO offers pick and drop services for almost anything within Delhi NCR, within 120 minutes.

Modus Operandi

Customers can use the Rapid TOTO mobile or web app to place their requests by filling in the order-now form. They can provide the pick-up and delivery addresses, along with any other delivery-related instructions and can choose a payment option as per their convenience. WhatsApp can also be used to place a service request.

Sellers/senders, who get their products delivered to their customers using Rapid TOTO, can opt to receive a TOTO card from the company. This card comes in handy when the customer decides to pay cash on delivery. On receiving the cash from the customer, Rapid TOTO transfers the money to the card within 45 minutes. The seller/sender can withdraw the cash from the card, whenever he/she wants.

The company has a fleet of trained delivery executives called the Rapid Heroes. They are the ones who take care of the delivery process on the ground. To prevent any untowardly incidents, Rapid TOTO makes sure these executives are properly verified. They undergo police verification and their actual residential addresses are also authenticated. The company also ensures that these executives have good communication skills, so that they can interact with the customers and clients in a proper and polite demeanour.

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Current Traction, Monetization And Road Ahead

The company earns its revenue by charging each order based on the distance between the pick and drop location and the delivery vehicle. For a two-wheeled delivery vehicle, the charges are INR 30 for the first 3 kms and INR 7 for each additional KM. For heavier cargoes, where eco vans and e-rickshaws are used, the cost starts from INR 50 for the first 3 kms and INR 14/km thereafter.

It also earns its revenue by strategic partnership with various brands. The company claims to have tie-ups with around 100 brands such as Justdial, Gianis, Bercos, Moti Mahal, Wengers, Cafe Brown Sugar and Ferns and Petals.

Aakash claims that the is growing fast with 100 percent sales increment and tie-ups every month. It aims to undertake about 6000 more deliveries till FY 2016 and clock a gross revenue of about $1.5 Mn.

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Apart from Sachin and Aakash, the company’s core team comprises of 9 more people and its operations team has a strength of 16 employees. It also employs 56 Rapid Heroes (delivery executives) who cover its current delivery radius that includes Delhi, Gurgaon, Noida and Faridabad. It plans to expand its operations to Mumbai soon.

Rapid TOTO is currently bootstrapped but is actively seeking investors. It’s planning to raise its seed round by end of this month.

The Traffic On The Logistics And Delivery Route Is Pretty Heavy

The company initially struggled with earning the faith of their customers, clients and investors. Aakash reveals that many of them even laughed and shrugged off their proposal. He stated that the company grew amidst the odds stacked against their favour and has reached its current position. “Within a span of just over a year, we have undertaken over 10,000 orders and partnered with over 100 big brands,” he added.

“Hyper-local delivery services have a huge market potential in India. Changing lifestyle, customer preferences and rising real estate costs are driving the growth of this business. With a large number of startups mushrooming in this space, the ones that deliver efficiently are more likely to succeed. This would require a company to “own-up” a location so that it becomes the partner-of-choice for that location,” opined Fazal Ahad, director, Merisis Advisors.

“Companies should diversify their clients and start delivering for multiple industries (and not stick to only food or medicine delivery; for example) in the long run. Managing the delivery team and containing attrition is also critical,” he further added.

Rapid TOTO however, faces some competition from players like Pickingo, Grab, and Roadrunnr. Aakash claims that Rapid TOTO is different from these startups. He said that business model of these companies are only somewhat similar to that of Rapid TOTO’s. The fact that, apart from merchants and businesses, it caters to the delivery woes of end consumers, sets it apart from other on-demand hyper-local delivery startups – which generally operate in the B2B space.

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Founded in December 2014 a group of IIT and IIM graduates, Pickingo offers B2B on-demand hyperlocal delivery logistics services. It undertakes the delivery operations for local merchants and streamlines the process for end consumers. In August this year, it raised $1.3 Mn in a funding round led by Orios Venture Partners and angel investor Zishaan Hayath. It is currently operational in six cities including Delhi-NCR, Mumbai, Bangalore, Pune, Jaipur and Hyderabad; it plans to expand its operations to 20 Tier 1 cities by end of this year.

Roadrunnr is another B2B hyper-local on-demand delivery startup that was founded in 2015 by Mohit Kumar and Arpit Dave. It helps merchants, restaurants and ecommerce companies with their delivery and logistic woes. In July this year, it raised $11 Mn in a Series A funding round led by Sequoia Capital, and existing investors Nexus Venture Partners and Blume Ventures.

Another player in this space is Townrush. This Bangalore-based B2B logistics delivery startup was founded in May this year by Saurya Prakash. It connects local merchants and customers with local logistic providers and manages each and every aspect of the delivery process, till the shipment safely reaches its destination. It raised an undisclosed amount in seed funding from Lightspeed Venture Partners in July this year.

Grab (formerly called Grab the Grub) is another hyper-local delivery startups that exclusively handles food logistics. It was founded by Jignesh Patel, Nishant Vora and Pratish Sanghvi in 2012. It raised $1 Mn from Oliphans Capital and independent investor Haresh Chawla, in April this year.

Earlier this month, Zomato acquired minority stakes in Pickingo and Grab to strengthen its food ordering and delivery business.

Editor’s Note

As customers get comfortable using the services offered by various on-demand hyperlocal startups, an increasing number of aspiring entrepreneurs, sensing the demand, are entering this space with their new startups. However, the competition is fierce and the survival of these startups is directly proportional to the consumer needs. The startup that quickly and accurately senses the needs of the customers and aligns its services to meet them will turn out to be the winner. But, in order to sustain this success, the startup also has to be quick to adapt and evolve, as consumer demands evolve.

“Hyper-local delivery startups are competing for a share of consumer’s wallet that goes towards neighborhood commerce. From food to grocery to medical products, each startup is busy building deep merchant relationships and a scalable hyper-local logistics network. The companies that will win will be the ones that solve for both and innovate on the business model – this industry is is not comparable to the cabs industry, unlike what some are saying. Margins will be hard to come even with scale,” summed up Rajinder Balaraman, vice president, Matrix Partners India Investment Holdings LLC.

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