Hyperlocal Delivery Startup NOW Hits Profitability with Close to 200K Monthly Deliveries & Over $1.5M Annualized Revenue
NOW is also Foraying into the B2B Hyperlocal space with initial beta customers being restaurants who are using NOW for sourcing Raw Material.
Delhi based NOW Delivery, which focuses primarily on Last Mile Deliveries has over 200+ Merchants (including the likes of Pizzahut, KFC, Burger King, Subway, Fortis etc.) using its services with over a 1000 active Delivery partners and is targeting to grow this number to 10,000 by the end of FY-18-19, the company’s chief executive Vivek Pandey said in an interview.
NOW operates in the Hyperlocal delivery space which saw a bunch of shutdowns in the last 2 years with even well-funded startups folding up due to faulty unit economics and scaling too horizontally.
But NOW has stood through this figuring out the right operational model and the portfolio mix of delivery categories. NOW is contribution margin positive and services Merchants across the spectrum in F&B, Healthcare, Pharma, This mix allows riders to get delivery orders at all times of the day and Varying SLA’s& Volumetric allows clubbing of orders per trip improving the yield per trip and rider earnings. This isn’t feasible in a pure play Food Delivery business.
Due to this portfolio mix NOW is able to offer dynamic pricing plans suited to merchants across categories which has helped NOW scale up.
In the last six months NOW has grown its business six times and with some more new exclusive tie ups in place its looking to grow 10x in the next 1 year.It has processed 1 Million transactions since its inception and will hit 3-4million transactions this financial year according to Bharat Khandelwal, COO-NOW.
On Competition Pandey said companies doing only Hyperlocal delivery most of them have either shutdown or changed focus to E-com which leaves the space wideopen. This reduction is focus is also evident from the fact that most of the large Food (QSR) & Medicine chains have made NOW a preferred partner and are quickly moving towards exclusivity with NOW which has already happened in the Delhi NCR region. Furthermore with all large accounts which have more than 5000+ pan India outlets there is an immense potential for NOW to scale up any city in India with existing partners and be profitable in the city in a short while.
On Competition from Food Delivery apps Pandey said that rather than using a Full Stack services of Swiggy/Zomato Restaurants are better off with a pure play logistics service such as NOW as the commissions charged by these companies eat away into the Restaurant margin on high value orders. Furthermore, while there are incremental orders on the 1st time from Food Delivery apps but it is the repeat orders which start hurting the restaurants because it is same people who could’ve ordered picking up the phone use an App for the same costing the restaurant a hefty commission. Which is the reason larger brands are moving to create their own ordering apps and integrating 3rd Party logistics provider.
With more and more Offline stores are choosing to offload their critical last-mile logistics piece to 3rd Party providers for better handling of peak demand and also for real-time tracking and using technology for the management of delivery. With Over 14M retail stores in the India, Last Mile delivery is an Infinite market.
NOW is also Foraying into the B2B Hyperlocal space with initial beta customers being restaurants who are using NOW for sourcing Raw Material. With 1.5M restaurant outlets in India and with a Daily requirement or perishable inventory it’s a huge market to be catered.
The company has raised close to a Million Dollars from various Strategic investors like Hero Electric‘s Promoter Naveen Munjal, AnuraagJaipuria (Director, Jai Drinks), RuchiransJaipuria (Director, Jaipuria Beverage and Food), Anuj Sanghi (Director Supreme Motors), Maple Capital, MapleAccelerator’s Abhinav Grover&Instavans’ Vinay Goyal in the past 2 Years.
About future fundraise plans Pandey said that the company has seen decent inbound interest and is in talks to raise 5-6M$ for capturing the entire NCR market and also servicing their key clients in cities of out of NCR
NOW was founded in 2016 by Pandey, Bharat Khandelwal, and SahilBhagat. Pandey, an alumnus of IIT Kanpur, had previously worked with companies such as Flipkart, Goldman Sachs and Morgan Stanley. Khandelwal was earlier associated with Times Internet. Bhagat is a computer science graduate from IIT.
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