Logistics and distribution startup ElasticRun is in talks to raise $50–55 million, led by South African internet and media group Naspers, valuing the company at $250 million, multiple people aware of the matter told ET.
Pune-based ElasticRun is an asset-light transportation network that caters to industries including consumer goods, online retail, manufacturing, automotive and hospitality.
The company, which is based on the shared economy concept, aggregates spare logistics infrastructure capacity from businesses like kirana (corner) stores, local couriers, and small and medium businesses to fulfill customer orders.
Since it does not own warehouses or delivery centres, the cost structure is variable and on a “per delivery” basis, unlike traditional logistics players. The company claims this significantly reduces the capital required to build a national-level network, eliminates capacity wastage in lean periods and loss of business during a spike in demand. Even though this network would have high per-unit variable costs, its net spend on logistics would be lower than fixed cost networks.
“Naspers believes that this model is the most capital efficient way to build a scalable technology logistics network in India. The intent for Naspers is to double down on the investment in the next eight to twelve months,” said one person directly aware of the deal.
Naspers and ElasticRun did not respond to emails till press-time, Sunday.
NTex Transportation Services, which owns and operates ElasticRun, said in regulatory filings that revenue for fiscal year 2018 stood at Rs 63 crore on a loss of Rs 17 crore. The company closed fiscal year 2019 at about Rs 200 crore, sources told ET. In August, ElasticRun raised Rs 58.2 crore from Kalaari Capital Partners and Norwest Venture Partners at a valuation of Rs 513 crore, regulatory filings show.
ElasticRun was founded by Sandeep Deshmukh, formerly a senior executive at Amazon India, and Saurabh Nigam and Shitiz Bansal, who were both with EdgeVerve, the product and platform unit of Infosys. Just before starting ElasticRun in 2016, Deshmukh was at Amazon India leading a similar business vertical “I Have Space” (IHS) — a crowd-sourced transportation channel for the etailer, and prior to that, Amazon’s Kirana Now initiative.
ElasticRun competes with Matrix Partners and Stellaris Venture Partners-backed Loadshare, which was founded by former Myntra top executive Raghuram Talluri.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.