Chaldal, Bangladesh’s largest grocery delivery platform, raises $10M Series C

Founded in 2013, Bangladesh’s Chaldal was one of the first grocery delivery startups in the world to use the “dark” store model, picking up orders from its own warehouses instead of retail stores. Now the company says it is the country’s second-largest grocery player and the largest grocery e-commerce platform, with 27 warehouses located in four cities. Chaldal plans to expand into 15 new cities with a recently-closed $10 million Series C. The round was led by Taavet Hinrikus, co-founder of Wise; Topia chief product officer Sten Tamkivi; and Xploration Capital, with participation from Mir Group.

When Chaldal launched in Dhaka eight years ago, it first picked up orders from local grocery stores. But most retailers in the city are very small and Chaldal was unable to guarantee items would be available for its customers. As a result, it decided to start building its own network of warehouses.

“When we started, Instacart was still the dominant model, but we took a different stand and said we want to deliver from our own warehouses because that leads to better inventory management,” co-founder and chief executive officer Waseem Alim told TechCrunch.

Now the company, a Y Combinator alum, has 27 warehouses located in four cities (Dhaka, Naryanganj, Chattogram and Jashore). It will expand to 15 new cities and plans to open 50 warehouses by the end of this year. In addition to its flagship grocery deliveries, Chaldal will expand GoGo Bangla, its on-demand logistics service for small e-commerce businesses, and the Chaldal Vegetable Network, which connects farmers directly to retailers. It also has plans to launch a direct-to-consumer pharmacy.

Chaldal claims that has generated $40 million in revenue and performed 2.5 million orders over the past 12 months, growing about 120% year-over-year. It currently sells about 8,500 kinds of products and wants to expand that to 30,000 SKUs by December.

One of Chaldal's "dark" stores, or warehouses

One of Chaldal’s “dark” stores, or warehouses

Alim says Chaldal’s core grocery operations have been profitable for a while now, and it only invests cash in building its technology or launching new verticals. One of the reasons it is able to make money is because Chaldal began batching deliveries early on, sending out riders from its full-time fleet with several orders at a time (it recently launched a part-time driver program). Batching also means Chaldal is able to offer deliveries in as little as 15 to 30 minutes.

Chaldal also worked closely with suppliers and manufacturers. “We are one of the most efficient online grocery retailers in the world in terms of amount of capital that has been invested in us versus our size, and that’s mainly because we have been really working with our supply chain and all those details,” Alim said.

For example, it sources produce directly from farms, and partners with large manufacturers like Unilever. “Walmart and stores like that don’t exist here, it’s mostly small retailers, so we’ve been able to have a huge impact on the supply chain side of things,” said Alim. “We are continuing to expand our micro-warehouse model and have started supporting, as part of the delivery mechanism we have built, a lot of small merchants,” including many sellers who signed up for GoGo Bangla during the pandemic.

#asia, #bangladesh, #chaldal, #fundings-exits, #groceries, #grocery-delivery, #on-demand, #startups, #tc

RaRa Delivery gets $3.25M for its ambitious on-demand delivery plans in Indonesia

RaRa Delivery’s ambitious goal is to offer same-day deliveries in Indonesia without burning cash like many on-demand logistics providers. The company announced today it has raised $3.25 million in seed funding led by Sequoia Capital India’s Surge program and East Ventures. Other participants included 500 Startups, Angel Central, GK Plug and Play and angel investors Royston Tay and Yang Bin Kwok.

Launched in 2019, RaRa Delivery relies on a proprietary engine that batches orders and optimizes delivery routes based on data like real-time traffic information. It currently operates in Greater Jakarta and is getting ready to expand into five other Indonesian cities this year.

RaRa Delivery’s goal is to integrate with all major marketplaces in Indonesia, so sellers can offer it as a delivery option to customers. It also partners with brands, small e-commerce businesses and seller aggregators. Some notable clients include e-commerce platform Blibli, coffee delivery startup Kopi Kenangan, Grab Merchant, healthcare platform Alodokter and grocery store Sayurbox. RaRa Delivery says its daily order volume has grown 15 times over the past year, due in part to increased demand for grocery and medical supply deliveries during the pandemic.

Before launching RaRa Delivery, co-founder and chief executive officer Karan Bhardwaj worked at Unilever, managing its e-commerce supply chain in Southeast Asia and Australasia. During that time, he dealt with many kinds of distribution channels, including marketplaces, e-commerce aggregators and last-mile delivery providers.

Over the past few years, Bhardwaj watched customer expectations for deliveries change. Many are no longer satisfied with even next-day delivery. They want their orders delivered the same day, often within a few hours.

“A good experience over time becomes a need rather than a luxury,” said Bhardwaj. The United States has Amazon Prime, China has courier service SF Express and South Korea has Coupang, but “same-day delivery adoption has not reached its true potential in Indonesia because of the lack of the right supply solution, and that’s exactly what we are trying to crack.”

Bhardwaj added that people are willing to pay two to three times more for same-day delivery versus next day delivery, and even higher fees for deliveries within an hour.

But many traditional logistics players, with their hub-and-spoke distribution models, are not designed for on-demand deliveries, while on-demand providers have high operational costs because their drivers fulfill one order per trip.

“If a business has 10 orders, they are going to send 10 drivers and everyone is going to pick up one order,” said Bhardwaj. “They can do a three-hour delivery service, but there is no consolidation, no optimization, the cost per order is very high, there distance limits, weight limits and they don’t offer cash on delivery.”

RaRa Delivery’s real-time batching engine was created as a more scalable and sustainable alternative. The company’s driver fleet fulfills orders for many different types of businesses—food and beverage, grocery, healthcare and e-commerce—which all have different time requirements for their deliveries. For example, a restaurant needs deliveries to happen within an hour, but for grocery stores that timeframe can be three hours, and for e-commerce stores, up to eight hours.

Once orders are made, RaRa Delivery’s system groups them into batches, optimizing capacity, distance, time slots and driving routes based on real-time traffic data. A batch can have between two to 15 orders, and their composition is flexible. For example, some batches might entail a series of pick-ups followed by deliveries, while others might have pick-ups interspersed with deliveries, depending on what creates the most efficient route.

Bhardwaj said this increases how much RaRa Delivery’s drivers can earn because they perform multiple deliveries per trip, and reduce their downtime. Each RaRa Delivery batch takes about two to six hours to complete.

“In a normal on-demand scenario, a driver takes an order, finishes that order and waits for another order. That waiting time is what reduces the potential earnings of a driver,” he said.

RaRa Delivery also enables cash on delivery. Typically, when a delivery service offers COD, that means drivers need to go back to a hub to drop off the money. RaRa Delivery’s reconciliation product shows drivers how much cash to collect for each order. Once they are done, it generates a code that the driver can use a convenience store to deposit the cash, instead of a hub.

The startup’s plans for its seed funding include expanding its product ecosystem, which currently includes the batching engine, a seller portal, real-time order tracking, a chatbot for customers and the COD reconciliation.

It’s focused on Tier 1 cities in Indonesia for its initial rollout, before expanding into smaller cities and covering all of Indonesia within a couple of years. Then RaRa Delivery plans to expand into other countries. Bhardwaj said its batching engine is geography-agnostic, so it requires minimal localization for new markets.

 

#asia, #e-commerce, #fundings-exits, #indonesia, #logistics, #on-demand, #on-demand-delivery, #rara-delivery, #southeast-asia, #startups, #tc

Vietnamese on-demand e-commerce platform Loship raises $12M at a valuation of $100M

Loship, the Vietnamese on-demand e-commerce platform that started as a reviews app, announced today it has raised $12 million in pre-Series C funding, bringing its valuation to $100 million. The round was co-led by BAce Capital, an Ant Group-backed venture firm, and the direct investment unit of Sun Hung Kai & Co Limited. 

Founded in 2017, Loship offered one-hour deliveries for a large range of products and services, including food, ride-hailing, medicine and B2B supplies. The company says it has more than 70,000 drivers and 200,000 merchants, and serves about 2 million customers in Hanoi, Ho Chi Minh City, Da Nang, Can Tho and Bien Hoa. 

The new round brings Loship’s total raised to $20 million. Its previous funding was a bridge round from MetaPlanet Holdings, announced in February 2021. Loship is in the process of raising a Series C, expected to close by the end of this year, and is in advanced talks with investors.

Co-founder and chief executive officer Trung Hoang Nguyen told TechCrunch that Loship raised a pre-Series C round because “there are so many investors participating in our Series C round that we find it would take a long time to completely close.” As a result, Loship decided to split the round into a pre-Series C and Series C. 

MetaPlanet Holdings returned for the pre-Series C round, which also saw participation from Wealth Well, Prism Ventures and SQ Capital Group (SCCG Ventures Asia). Individual investors included former Starbucks Vice President Mojtaba Ahkbari; FNZ Group APAC chief executive officer Tim Neville; BNP Paribas global macro sales director Ben Fitzpatrick; DASS-Inc founder and CEO Wayne Cowden; EC1 managing partners Simon Eglise; Ilwella Pty Ltd director Quentin Flannery; Prenzler Group director Jonathan Feil; and iVS CEO Milan Reinartz

Loship’s new funding will be used to expand into new cities and grow verticals like B2B deliveries for small food and beverage businesses and retail stores. As part of the round, BAce Capital founder Benny Chen, the former managing director of Ant Group India, where he invested in Paytm and Zomato, will join Loship’s board of directors. 

Co-founder and CEO Trung Hoang Nguyen said Loship has a “very clear path to profitability.” The company started out as an online review platform, before people began using it to buy and sell items through chats. 

“Back then, people used our Lozi app the same way as eBay, where they could list their products, buy from and sell to others. However, we couldn’t really know whether the transaction via Lozi was completed, especially when it was purely online chat,” Nguyen told TechCrunch. “The best way to know the exact status of the transaction was to control the delivery.” 

As a result, the company launched Loship in late 2017, starting with food deliveries and then expanding into other verticals. Nguyen explained that its platform includes “basically anything that can fit on or be transported legally by motorcycle.” This means verticals dedicated to ride-hailing, groceries, medicine, laundry, packages, flowers, beauty products and B2B supplies like ingredients and food packaging. 

The number of its verticals helps Loship differentiate from large players like Grab and Gojek, Nguyen said. He added that being a homegrown startup also gives it an advantage. 

“As the only local player, we understand our local customers on a deeper level compared to other regional ones. We are locals and we have our winning playbook. We strategically enter into new and relatively untouched markets like lower-tier cities, grow the customer base and then take things forward from there.” 

Loship’s plan until the end of 2021 is to expand into five more major cities, bringing the total number of cities it operates in to 10. Then it plans to launch in Tier 2 and 3 cities in Vietnam, before expanding regionally in Southeast Asia (Nguyen describes Laos and Cambodia as “must-win markets.”)

In a statement about the funding, Chen said, “Loship creates a strong ecosystem which adds value to small business, customers as well as riders. Under Trung’s entrepreneurship and leadership, we saw the company get much stronger during the pandemic by constantly bringing product and service innovation to its merchants and users.”

#e-commerce, #fundings-exits, #loship, #on-demand, #southeast-asia, #startups, #tc, #vietnam

After entering Japan, Coupang continues its international expansion with Taiwan

One of Coupang's delivery drivers on a scooter in Taipei, Taiwan

A Coupang delivery driver in Taipei City

One month after entering Japan, its first international market, Coupang has launched in Taiwan. The South Korean e-commerce giant began offering its service in Taipei City’s Zhongshan neighborhood, allowing people there to order items through its app for on-demand delivery between 8AM to 11PM, charging a delivery fee of 19 NTD (about 68 cents USD).

Coupang is testing its service and will assess different models for its delivery infrastructure in Taiwan. The selection of items is similar to what’s available in Japan–customers can buy food, beverages, daily necessities and pet supplies. In Taipei, Coupang’s most direct competition is currently Uber Eats and Foodpanda, which deliver from some retailers, including drugstores, as well as restaurants. A key difference is that Coupang is currently fulfilling orders directly, instead of sending couriers to stores or restaurants.

As it expands into more product categories, it will also compete with e-commerce platforms like Momo and PChome, which both offer 24-hour deliveries. In South Korea, Coupang’s e-commerce platform offers millions of products. Its other services include Rocket Fresh for perishable groceries and Coupang Eats for meals.

Coupang held a successful initial public offering in March on the New York Stock Exchange. Founded in 2010, Coupang has become the e-commerce market leader in South Korea and also developed an international reputation for “out-Amazoning Amazon” with the speed of its deliveries and dollar retention rate (or how often customers return and spend money).

Coupang invested heavily in its own logistics infrastructure when it launched a decade ago, but now also partners with third-party providers in South Korea. It remains to be seen what kind of fulfillment model it will decide on in Japan and Taiwan. The company hasn’t announced what its next market is, but it has been hiring in Singapore for lead operations, retail and logistics roles.

#asia, #coupang, #ecommerce, #on-demand, #taiwan, #tc

Cloud kitchen startup JustKitchen to go public on the TSX Venture Exchange

JustKitchen, a cloud kitchen startup, will start trading on the Toronto Stock Exchange (TSX) Venture Exchange on Thursday morning. It is doing a direct listing of its common shares, having already raised $8 million at a $30 million valuation.

The company says this makes it one of the first—if not the first—cloud kitchen company to go public in North America. While JustKitchen launched operations last year in Taiwan, it is incorporated in Canada, with plans to expand into Hong Kong, Singapore, the Philippines and the United States. TSX Venture is a board on the Toronto Stock Exchange for emerging companies, including startups, that can move to the main board once they reach certain thresholds depending on industry.

“It’s a really convenient way to get into the market and with the ghost kitchen industry in particular, it’s early stage and there’s a lot of runway,” co-founder and chief executive officer Jason Chen told TechCrunch. “We felt there really was a need to get going as quickly as we could and really get out into the market.”

Participants in JustKitchen’s IPO rounds included returning investor SparkLabs Taipei (JustKitchen took part in its accelerator program last year), investment institutions and retail clients from Toronto. More than half of JustKitchen’s issued and outstanding shares are owned by its executives, board directors and employees, Chen said.

One of the reasons JustKitchen decided to list on TSX Venture Exchange is Chen’s close ties to the Canadian capital markets, where he worked as an investment banker before moving to Taiwan to launch the startup. A couple of JustKitchen’s board members are also active in the Canadian capital markets, including Darren Devine, a member of TSX Venture Exchange’s Local Advisory Committee.

These factors made listing on the board a natural choice for JustKitchen, Chen told TechCrunch. Other reasons included ability to automatically graduate to the main TSX board once companies pass certain thresholds, including market cap and net profitability, and the ease of doing dual listings in other countries. Just Kitchen is also preparing to list its common shares on the OTCQB exchange in the U.S. and the Frankfurt Stock Exchange in Germany.

#asia, #canada, #cloud-kitchens, #food, #fundings-exits, #ghost-kitchens, #justkitchen, #on-demand, #startups, #taiwan, #tc, #tsx-venture-exchange

Uber entices drivers back post-pandemic with $250 million stimulus

Despite the classification of ride-hail drivers as “essential workers” during the early days of the pandemic, last April Uber’s business dropped by 80%. Drivers decided they’d rather not risk contracting or spreading COVID-19 for the measly revenue provided by the few rides per day they were getting, so when the federal CARES Act extended the Pandemic Unemployment Assistance to gig workers, many Uber drivers decided to hang up their keys. 

With more than a quarter of the U.S. population already vaccinated, Uber is now in a sticky situation wherein there are more riders requesting trips than there are drivers available. The ride-hailing giant not only wants drivers to know that there’s business to be had once again, but they also want to sweeten the deal with incentives. 

On Wednesday, the company announced the launch of a $250 million driver stimulus to welcome drivers back into the fold and recruit new ones as the pandemic begins to ease in the U.S. Both returning drivers and new drivers will be receiving bonuses over the coming months, according to an Uber spokesperson.  

“In 2020, many drivers stopped driving because they couldn’t count on getting enough trips to make it worth their time,” reads the blog post announcing the stimulus. “In 2021, there are more riders requesting trips than there are drivers available to give them—making it a great time to be a driver.”

Due to high rider demand and low supply of drivers, the current median hourly rate for cities like Philadelphia, Austin, Chicago, Miami and Phoenix is $26.66, which is 25% to 75% higher than they were in March of last year. Uber wants drivers to take advantage of the higher earnings now because “this is likely a temporary situation.” Meaning as the country recovers and more gig workers get back behind the wheel, earnings will likely decrease from their current levels. 

The stimulus money will go on top of those hourly rates, a spokesperson told TechCrunch. The incentive structure will be based on individual activity, as well as location. For example, in Austin, drivers are guaranteed $1,100 if they complete 115 trips. In Phoenix, drivers can earn an extra $1,775 for 200 trips. 

The money will also go towards guaranteed minimum pay and on-boarding for new Uber drivers, and the full $250 million pool is coming directly from Uber’s pockets. The company’s shares declined as much as 3.6% during trading on Wednesday. 

Uber is also aiming to help streamline the process of getting drivers vaccinated with an in-app booking portal as part of its partnership with Walgreens.

#automotive, #gig-economy, #gig-workers, #on-demand, #ride-hailing, #rideshare, #transportation, #uber, #uber-drivers

The future of SaaS is on-demand: Use experts to drive growth and engagement

For SaaS companies, not having a gig economy strategy as we start 2021 is like missing the internet trend in 1990 or failing to get ahead of the mobile revolution in 2010.

Leading SaaS are now using on-demand experts to revolutionize the customer experience. They’re growing revenue and post-sales retention and even using the insights to build better products. According to Staffing Industry Analysts (SIA), the global gig economy is approaching $5 trillion as project-based staffing continues this digital transformation.

SaaS superstars like Amazon AWS and Qualtrics have been investing in on-demand expertise for years, and in 2019, market research firm Million Insights published a market report that predicted tech services will be a trillion dollar market by 2025. Much of this growth boils down to some simple facts about the increasingly emotional act of consumption.

A 2013 Gallup report found that customers who had a strong attachment to a brand spend a full 23% more than an average customer of the same brand.

By bringing human experts into their software solutions, companies can engage with their customers to solve problems more efficiently and in a more personalized manner.

Conversely, more than eight in 10 executives interviewed in a 2015 report from The Economist Intelligence Unit believed their companies lose sales each year because of a failure to engage properly with the customer.

By bringing human experts into their software solutions, companies can engage with their customers to solve problems more efficiently and in a more personalized manner while simultaneously gathering important insights about how to make their products more intuitive.

It’s a win-win for both sides, but it involves putting aside the notion that new product features will solve your customers’ every need. They won’t. In fact, more than 80% of new product features are never used.

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Software companies race to release new products and features because they want to provide the very best technologies to their customers and edge out the competition. Yet no matter how well-intended their decisions, too many SaaS features fail to drive real customer engagement. Why? Because no matter how advanced the software is, it can only do so much.

And when it comes to understanding and solving the customer’s problem, too often the new features simply aren’t enough.

There are four core drivers for why on-demand experts are a critical requirement for any business:

Need for increased customer retention

In today’s time-starved world, most of your customers are not able to learn and understand the full capabilities of your offering on their own. In fact, most of your customers are using less than 20%, and possibly as little as 5% of your feature set. Their underutilization directly impacts the retention and growth of your service, because customers don’t value capabilities they don’t use or even know about. From a financial perspective, the ROI of retention cannot be overstated. The Harvard Business Review reported that a mere 5% increase in retention can increase profits between 25% and 95%.

#ai, #cloud, #column, #ec-cloud-and-enterprise-infrastructure, #ec-column, #gig-economy, #machine-learning, #on-demand, #saas

JustKitchen is using cloud kitchens to create the next generation of restaurant franchising

JustKitchen operates cloud kitchens, but the company goes beyond providing cooking facilities for delivery meals. Instead, it sees food as a content play, with recipes and branding instead of music or shows as the content, and wants to create the next iteration of food franchises. JustKitchen currently operates its “hub and spoke” model in Taiwan, with plans to expand four other Asian markets, including Hong Kong and Singapore, and the United States this year.

Launched last year, JustKitchen currently offers 14 brands in Taiwan, including Smith & Wollensky and TGI Fridays. Ingredients are first prepped in a “hub” kitchen, before being sent to smaller “spokes” for final assembly and pickup by delivery partners, including Uber Eats and FoodPanda. To reduce operational costs, spokes are spread throughout cities for quicker deliveries and the brands each prepares is based on what is ordered most frequently in the area.

In addition to licensing deals, JustKitchen also develops its own brands and performs research and development for its partners. To enable that, chief operating officer Kenneth Wu told TechCrunch that JustKitchen is moving to a more decentralized model, which means its hub kitchens will be used primarily for R&D, and production at some of its spoke kitchens will be outsourced to other food vendors and manufacturers. The company’s long-term plan is to license spoke operation to franchisees, while providing order management software and content (i.e. recipes, packaging and branding) to maintain consistent quality.

Demand for meal and grocery deliveries increased dramatically during the COVID-19 pandemic. In the United States, this means food deliveries made up about 13% of the restaurant market in 2020, compared to the 9% forecast before the pandemic, according to research firm Statista, and may rise to 21% by 2025.

But on-demand food delivery businesses are notoriously expensive to operate, with low margins despite markups and fees. By centralizing food preparation and pickup, cloud kitchens (also called ghost kitchens or dark kitchens) are supposed to increase profitability while ensuring standardized quality. Not surprisingly, companies in the space have received significant attention, including former Uber chief executive officer Travis Kalanick’s CloudKitchens, Kitchen United and REEF, which recently raised $1 billion led by SoftBank.

Wu, whose food delivery startup Milk and Eggs was acquired by GrubHub in 2019, said one of the main ways JustKitchen differentiates is by focusing on operations and content in addition to kitchen infrastructure. Before partnering with restaurants and other brands, JustKitchen meets with them to design a menu specifically for takeout and delivery. Once a menu is launched, it is produced by JustKitchen instead of the brands, who are paid royalties. For restaurants that operate only one brick-and-mortar location, this gives them an opportunity to expand into multiple neighborhoods and cities (or countries, when JustKitchen begins its international expansion) simultaneously, a new take on the franchising model for the on-demand delivery era.

One of JustKitchen's delivery meals, with roast chicken and vegetables

One of JustKitchen’s delivery meals

Each spoke kitchen puts the final touches on meal before handing them to delivery partners. Spoke kitchens are smaller than hubs, closer to customers, and the goal is to have a high revenue to square footage ratio.

“The thesis in general is how do you get economies of scale or a large volume at the hub, or the central kitchen where you’re making it, and then send it out deep into the community from the spokes, where they can do a short last-mile delivery,” said Wu.

JustKitchen says it can cut industry standard delivery times by half, and that its restaurant partners have seen 40% month on month growth. It also makes it easier for delivery providers like Uber Eats to stack orders, which means having a driver pick up three or four orders at a time for separate addresses. This reduces costs, but is usually only possible at high-volume restaurants, like fast food chain locations. Since JustKitchen offers several brands in one spoke, this gives delivery platforms more opportunities to stack orders from different brands.

In addition to partnerships, JustKitchen also develops its own food brands, using data analytics from several sources to predict demand. The first source is its own platform, since customers can order directly from Just Kitchen. It also gets high-level data from delivery partners that lets them see food preferences and cart sizes in different regions, and uses general demographic data from governments and third-party providers with information about population density, age groups, average income and spending. This allows it to plan what brands to launch in different locations and during different times of the day, since JustKitchen offers breakfast, lunch and dinner.

JustKitchen is incorporated in Canada, but launched in Taiwan first because of its population density and food delivery’s popularity. Before the COVID-19 pandemic, food delivery penetration in the U.S. and Europe was below 20%, but in Taiwan, it was already around 30% to 40%, Wu said. The new demand for food delivery in the U.S. “is part of the new norm and we believe that is not going away,” he added. JustKitchen is preparing to launch in Seattle and several Californian cities, where it already has partners and kitchen infrastructure.

“Our goal is to focus on software and content, and give franchisees operations so they have a turnkey franchise to launch immediately,” said Wu. “We have the content and they can pick whatever they want. They have software to integrate, recipes and we do the food manufacturing and sourcing to control quality, and ultimately they will operate the single location.”

#asia, #canada, #cloud-kitchen, #food, #food-delivery, #justkitchen, #on-demand, #startups, #taiwan, #tc

Hong Kong-based Pickupp makes logistics more affordable for e-commerce sellers

Logistics startup co-founder and chief executive officer Crystal Pang

Logistics startup co-founder and chief executive officer Crystal Pang

Logistics is one of the biggest challenges in e-commerce, especially for smaller merchants. Pickupp helps them compete in the on-demand economy with flexible, customizable delivery services. Based in Hong Kong, Pickupp also operates in Malaysia, Singapore and Taiwan, and claims it can save clients an average of about 28% in logistic costs.

Pickupp is able to do this with an asset-light business model. Instead of operating warehouses or its own fleets, it partners with logistics companies and uses proprietary software to make delivering batches of orders more efficient.

The company, which currently serves about 10,000 e-commerce merchants, announced last month it closed an undisclosed amount in Series A funding from Vision Plus Capital, Alibaba Enterpreneurs Fund, Cyperport Macro Fund, Swire Properties New Ventures and SparkLabs Taipei.

Pickupp currently offers three kinds of door-to-door delivery services: on-demand couriers who deliver within a four hour window, same day deliveries, and one to three day deliveries. It can also customize logistics and last-minute delivery solutions for businesses.

In Singapore, Pickupp runs its own e-commerce platform. Called Shop On Pickupp, the platform enables merchants to move more of their retail operations online and has been used to digitize marketplaces like the Shilin Singapore Night Market during the COVID-19 pandemic.

Before starting Pickupp, co-founder and chief executive officer Crystal Pang, a software engineer by training, was part of the team that launched Uber in Hong Kong in 2014.

“Around that time, I started looking into logistics, because I found out a lot of merchants were trying to use Uber cars to deliver other stuff, anything but people,” she said.

But unlike delivery services, merchants couldn’t bargain with Uber drivers—for example, negotiating discounted fees if they were able to wait longer for a vehicle. “That’s the gist of logistics, because everyone wants to get part of those cost savings,” Pang said. Sensing a market opportunity, Pang began using her software engineering background to think of a solution.

Pickupp was founded in December 2016 and began operating the next year. When it launched, Pickupp already had formidable rivals like Gogovan and Lalamove. But since those companies focused mainly on on-demand, point-to-point delivery, Pang saw an opportunity to tackle other parts of the supply chain.

“How we see ourselves compared to other logistics companies is that we fulfill all these e-commerce needs. We behave like a logistics company, but we don’t need to own anything. So we perform the function of a traditional logistics company, which in this area is SF Express or Ninja Van, that lease warehouses and operate their own fleets, but Pickupp choses a lightweight asset approach to getting it done,” she said.

Pickupp positions itself more as a data and tech company, Pang added.

“You can almost imagine us as a monitoring system,” she said. Pickupp partners with sorting facilities, cross-border freight forwarders and delivery vehicles, and gives merchants visibility into where orders are along the supply chain.

Its system keeps costs down by predicting when and where available delivery people will be available, so it can match them with batches of orders. This also prevents bottlenecks during demand spikes and makes sure couriers are used at the most capacity possible, which is especially important for holidays and major shopping events like Double Eleven and Black Friday.

One of Pickupp’s advantages is that its system is designed to be flexible so it can scale into new Asian markets quickly. Pang told TechCrunch that the round will be used to add more services, and invest in machine learning, predictive analytics and understanding customer purchasing behavior. The company also plans to expand into up to five new Asian markets over the next three years.

#asia, #delivery, #e-commerce, #fundings-exits, #hong-kong, #logistics, #on-demand, #pickupp, #startups, #supply-chain, #tc

Bolt raises $182M to expand its on-demand transportation network in Europe and Africa

In the midst of a major second wave of coronavirus infections across Europe, an Estonian startup that’s building an on-demand network to move food and people around in cars, on scooters and on bikes across developed and emerging markets in EMEA is announcing a major round of funding.

Bolt, which covers 200 cities in 40 countries with its delivery and transportation services, has raised €150 million ($182 million at current rates) in an equity round that CEO and co-founder Markus Villig said in an interview will be used to double down on geographic expansion and to help it become the biggest provider of electric scooters in Europe.

Bolt currently has some 50 million customers using its services, and Villig has built the business around two main areas to differentiate it from the Ubers of the world: strong capital efficiency (or “frugality” as he describes it) and putting a heavy emphasis on services for emerging markets, alongside launches in cities like London and Paris and, soon, Berlin.

“This round was the first time we raised with most of the previous round still in the bank, despite the pressures of Covid” he said. “This shows the frugality of the company. Due to lockdowns, we were not as aggressive as we would have liked to be, so financially we are now in a very good position for 2021.”

The round is being led by D1 Capital Partners with participation also from Darsana Capital Partners. D1 has this year been a huge player in growth rounds for some of the very biggest startups: it has made investments in eyewear giant Warby Parker, gaming engine maker Unity, car sales portal Cazoo, and fintech TransferWise, collectively with valuations into the multiple billions of dollars.

On that note, Villig wouldn’t disclose what Bolt’s valuation is but said that it was closer to the multiples of 1.5x on GMV, a la the recently listed DoorDash, than it is closer to “others” in the transport space that are seeing valuations closer to 0.5x.

He also confirmed to me that Bolt is doing about €2 billion in GMV currently annually, which would give it a valuation, by his hinted calculations of €3.5 billion ($4.3 billion). No comment from Villig on my number crunching, but he also didn’t dispute it.

For some context, in May of this year Bolt was valued at $1.9 billion after raising just over $100 million. At the time, it said it had 30 million users, so it’s added 20 million in about six months.

The company’s rise has been an interesting counterpoint to the likes of Uber, which built its business with early, aggressive — and as it turned out, very costly — growth into multiple markets and product areas, a number of which it has more recently been divesting (see also here, here and here for other examples).

Founded originally as Taxify and slowly growing the business just around ride-hailing for a number of years in less-scrutinized emerging markets, the company rebranded in 2019 as it kicked its strategy into a higher gear, with launches in cities like London and a move into micromobility, primarily around electric scooters. Its current list of biggest markets reflects that mix: Villig said they were the UK, France, South Africa and Nigeria.

Not all of that has been smooth, with too-aggressive moves, such as a failed initial launch in London — scuppered when regulators quickly responded to its attempt at exploiting a loophole to get a license — quickly burning the company (and possibly teaching Villig a lesson he’s tried to remember going forward).

Even with the shift, Villig said that his aim is to keep the company operating on the same frugal ethos when it comes to considering new investments and how to grow. He noted that in this year that has seen so many job losses, in particular in businesses that have seen massive drops in uses, Bolt has not laid off anyone.

It’s interesting, indeed, to see how and which companies choose to “zig” while others “zag” at the moment. The food delivery business is a case in point. We are seeing a number of consolidations underway, with Uber acquiring Postmates, and Just Eat Takeaway (itself a big merger) acquiring Grubhub. Alongside that there have also been a number of closures of smaller players that found it too costly to try to scale.

“What most people have not realized is that the food part is what we are most optimistic about,” Villig said. “Currently we are adding restaurants by the day. There are cost synergies on a lot of fronts, including the supply side, where drivers can serve passengers and food. But also today we have had to decline some drivers for car-based services because they don’t have the right licenses, but now we can offer them to carry goods on bikes, which doesn’t require that license at all. We can offer something to drivers that we weren’t able to do. And what that means is no need to spend money on finding drivers.”

He said Bolt was “lucky” to get into food, even as late as 2019 since restaurants that were already interested were augmented by a new wave of them in the wake of the health pandemic and forced closures and reduced diners overall in venues. “They were all keen to get additional income and were eager to try out new platforms,” he said.

That willingness to find the way ahead even in what looks like a murky or hard market is what has brought investors around this time. Villig said they were already talking to a lot of them, and so it made sense to close the round to prepare for 2021.

“We are excited to partner with Bolt as they continue to build a market-leading mobility platform across Europe and Africa,” said Dan Sundheim, founder of D1 Capital, in a statement. “The team has executed incredibly well during a challenging year and continues to provide millions of users with safety, flexibility and great value. We are optimistic about the growth opportunity ahead for Bolt after the COVID-19 pandemic and look forward to supporting the team as they invest in innovation over the coming years.”

#bolt, #d1-capital-partners, #europe, #food, #funding, #on-demand, #tc, #transportation

KKR, Rakuten to acquire most of Walmart’s stake in Japanese supermarket chain Seiyu

Walmart announced today it will sell most of its shares in Seiyu, the Japanese supermarket chain it acquired 12 years ago, to KKR and Rakuten. The deal values Seiyu at about $1.6 billion and means Walmart will almost completely exit its operations in Japan.

Under the agreement, investment firm KKR will buy a 65% stake in Seiyu, while Rakuten, Japan’s largest e-commerce company, will take a 20% stake through a newly created subsidiary called Rakuten DX. Walmart will retain a 15% stake in Seiyu.

After struggling with strong competition in Japan and low margins, Walmart reportedly considered relisting Seiyu or its holding company, Walmart Japan Holdings last year.

Rakuten is already familiar with Seiyu’s business because it formed a strategic alliance with Walmart in 2018 that included launching an online grocery delivery service in Japan. Called Rakuten Seiyu Netsuper, the online delivery service includes a dedicated fulfilment center, in addition to inventory picked up from Seiyu’s supermarkets.

After the deal, Seiyu will be part of Rakuten DX, which is intended to bring more brick-and-mortar stores online through Rakuten’s e-commerce and cashless payment channels.

Japan’s online grocery delivery market has trailed behind other countries, due in part to the reluctance of shoppers to purchase fresh food online. But the COVID-19 pandemic prompted a rapid shift in consumer habits. According to a July 4 report from the Japan Times, internet sales accounted for about 5% of total grocery sales, compared to 2.5% before the pandemic.

Rivals to Rakuten include grocery delivery services run by Aeon (in partnership with Ocado), Amazon and Ito-Yokado.

#asia, #fundings-exits, #japan, #kkr, #on-demand, #online-grocery, #rakuten, #rakuten-dx, #seiyu, #tc, #walmart

Former Uber CTO Thuan Pham joins South Korean e-commerce leader Coupang

Thuan Pham, who stepped down as Uber’s chief technology officer and longest-serving top executive in May, has a new job in South Korea. Coupang, the country’s largest e-commerce company by market share, announced today it has hired Pham as its new CTO.

For Pham, joining Coupang, a SoftBank-backed unicorn that holds a 24.6% market share in South Korea, the fifth-largest e-commerce in the world, is a departure from his original post-Uber plans. In an interview with Bloomberg after leaving Uber, which Pham joined in 2013, he expressed relief about his decision, describing leading the ride-hailing giant’s technology division as “a very heavy burden.” After leaving, Pham intended to spend his time teaching university students and mentoring entrepreneurs instead of joining another large tech company.

“I thought that there was a slim opportunity that I would take on another operational role again, but the bar for that would have been super high,” Pham told TechCrunch. “It had to be even more interesting than what I did at Uber for me to jump in.”

After meeting Coupang chief executive officer Bom Kim, who founded the company in 2010, however, Pham said he was intrigued by the opportunity to apply his experience at Uber to a company in a different sector.

Coupang is known for its very fast delivery services. These include Dawn Delivery, which drops off packages, including fresh groceries, ordered by midnight at customers’ doors before 7 AM. It is currently available in Seoul, where Coupang is headquartered, and several other cities. Pham said Coupang’s ability to guarantee early morning deliveries was a major hook.

“I thought, holy smokes, this is actually really innovative. Maybe it’s not a technology innovation, but it’s a business innovation, and of course technology has to enable that at scale,” he said.

Pham said he wasn’t interested in working at another ride-sharing company, but “a lot of the concepts are similar” in on-demand e-commerce. For example, both have to route drivers to pick up passengers (or, in Coupang’s case, packages) and drop them off as efficiently as possible, and both need to use dynamic pricing to respond to demand and supply, which Pham said is especially relevant to deliveries of fresh groceries.

“There a lot of challenges that you have to worry about, from the talent perspective, technology perspective, logistics process perspective and so on,” he said. “I figured a lot of things I learned at my previous company could really be applied to help, even though it’s a different domain.”

Despite Coupang’s position as the largest e-commerce player in one of the world’s largest e-commerce markets, Pham said he thinks the company is “still in the very early days.” For example, there are opportunities for building out its logistics infrastructure, inventory and verticals, including its third-party marketplace, which includes warehouse and fulfillment capability for sellers.

Pham, who recently spent five weeks in Seoul before returning home to California, rode along on a night delivery shift to get a feel for how Coupang’s logistics chain works. One thing that impressed him was the density of Seoul, which creates unique challenges and opportunities for on-demand e-commerce companies there.

“We have a few hundred items on the truck and the truck was in a very small radius area. Sometimes we enter an apartment building and we deliver to two or three homes in that building,” he said. “That kind of density is a huge advantage for a logistics company, compared to where I live in the U.S.”

Using tech to address working conditions

After it launched ten years ago, Coupang initially relied on third-party carriers before building a network of in-house fulfillment centers. This included in-house trucks and drivers referred to as “Coupang men” who also served as customer service representatives.

As the company scaled up, however, it began relying more on third-party logistics providers again. Pham said Coupang currently employs tens of thousands of full-time employees for delivery, but also relies on flex workers in order to meet spikes in demand, for example during holidays. This one of the areas where Pham said his experience at Uber can benefit Coupang.

“A bunch of the stuff I worked on and the problem I solved at the previous company is really applicable because everything there was flex,’ said Pham. “But here you have a set of workers who are on-demand, if you will, and how do you make sure that the proper incentives are there? If you have huge demand and not enough capacity, then you have to pay a higher price for people to take those jobs, those routes and those time blocks.”

But for many companies whose business models are built around on-demand services, the convenience for customers can come at a cost for workers. Like Uber and Amazon, Coupang’s working conditions have also come under attack, especially as the COVID-19 pandemic dramatically increased demand for deliveries.

During the pandemic, Coupang has been criticized for not doing enough to prevent infections at two of its logistics centers. Working conditions at it and other logistics companies, including CJ Logistics, came under scrutiny after worker deaths, which labor groups attributed to overwork (in response, a Coupang official told the Korea Times its delivery and distribution center personnel are all limited to working 52-hour weeks).

Pham said that Coupang has spent heavily on COVID-19 safety precautions, including disinfectants, increasing the spacing of goods in its warehouses and using automated systems to track, pick up and pack inventory in order to maintain social distancing.

To improve working conditions for delivery workers, Pham said the company is continuing to hone the algorithms that direct drivers to customers’ addresses.

“I know this firsthand from Uber, that the clearer the routing instruction, the less stress it puts on drivers mentally,” Pham said.

While riding on an overnight route with a delivery driver, for example, he realized there is room for improvement in Coupang’s packet sorting system, so drivers spend less time looking in bins for small packets when they reach their destination.

Pham said that ultimately, he believes Coupang’s technology can give drivers more control over what they do during their shifts, either decreasing their workload or allowing them to perform more deliveries to make more money.

#asia, #coupang, #e-commerce, #on-demand, #south-korea, #startups, #tc, #thuan-pham, #uber

Alibaba Group will spend $3.6 billion to take control of Chinese supermarket giant Sun Art

Alibaba Group said today it will spend about $3.6 billion to take a controlling stake in Sun Art, one of China’s largest big-box and supermarket chains. After the transaction is complete, Alibaba Group will own 72% of Sun Art.

As in other countries, COVID-19 lockdowns increased demand for online food orders in China, drawing in shoppers who had still preferred to buy groceries in person. Even though lockdowns have lifted, many have continued to purchase online. Alibaba’s new investment in Sun Art will be made by acquiring 70.94% of equity interest in A-RT Retail Holdings from France-based Auchan Retail International. A-RT Retail holds about 51% of the equity interest in Sun Art.

After the deal closes, Alibaba will consolidate Sun Art in its financial statements. Sun Art chief executive officer Peter Huang has also been named its new chairman.

Alibaba first invested in Sun Art back in 2017, spending about $2.88 billion to pick up a 36.16% share in the chain, whose brands include RT-Mart, as part of its “New Retail” strategy.

“New Retail” aims to blur the lines between online and offline commerce through steps like turning physical stores in pickup points for online orders, integrating supply chains and enabling shoppers to use the same digital payment methods on its e-commerce platforms and in brick-and-mortar stores.

All of Sun Art’s 484 physical retail locations in China are now integrated into Alibaba’s Taoxianda and Tmall Supermarket platforms for groceries, as well as Ele.me and Cainiao, its on-demand food demand delivery app and logistics businesses, respectively. For customers, this means faster deliveries and larger selections, while giving Alibaba more sources of data it can use to improve its supply chain and business operations.

Other e-commerce companies are taking a similar approach to integrating offline and online grocery shopping, including Alibaba’s main rival JD, which has similar alliances with supermarket group Yonghui and Walmart.

In press statement, Alibaba chairman and chief executive officer Daniel Zhang said, “As the COVID-19 pandemic is accelerating the digitization of consumer lifestyles and enterprise operations, this commitment to Sun Art serves to strengthen our New Retail vision and serve more consumers with a fully integrated experience.”

#alibaba, #alibaba-group, #asia, #china, #food, #fundings-exits, #grocery-delivery, #o2o, #on-demand, #sun-mart, #tc

Gojek appoints Amazon, Microsoft veteran as its new chief technology officer

Indonesia-based ride-hailing company and “super app” Gojek said today that it has named a new chief technology officer. Severan Rault, who previously held leadership positions at Amazon and Microsoft, takes over the role from Ajey Gore, who announced last month he was leaving for personal reasons.

In a statement, the company said Rault will oversee Gojek’s engineering teams in Southeast Asia and India and report to co-chief executive officer Kevin Aluwi.

Rault has a long history of leading engineering teams at large tech companies, as well as his own startups.

Before joining Gojek, Rault worked at Betawave, a virtual reality studio he founded in 2016. During his stint at Amazon, Rault was one of the founders of Prime Air, the company’s drone delivery program. At Microsoft, he was the principal architect of Bing, the company’s search engine. Rault’s other experience include founding Kikker Interactive, a wireless solutions provider that was acquired by Microsoft in 2008.

Rault’s appointment comes at a critical time for Gojek as it faces competition from rival Grab and deals with the fallout of the COVID-19 pandemic. Last month, Gojek said it was laying off 430 employees, or about 9% of its workforce, and closing GoLife, its lifestyle services division, to focus on its core payments, transportation and food delivery businesses as part of its long-term response to the pandemic.

Founded in 2010 as a motorcycle ride-hailing company, Gojek has since transformed itself into a “super app” that offers online payments and a roster of on-demand services, including transportation, ecommerce deliveries and logistics. Gojek recently added Facebook and PayPal to a list of high-profile investors, including Google and Tencent.

Gojek disclosed in March that it is valued at $10 billion and now has over 170 million users, but it faces fierce rivalry from Grab, another Southeast Asian on-demand ride-hailing and logistics platform that is also building an online financial services business. With a valuation of $14 billion, Grab is the larger company. Earlier this year, reports emerged that the two were discussing a merger, which Gojek denied and Grab declined to comment on.

In statement, Rault said, “It is a time like no other to be at Gojek. The company is entering a critical phase as it moves from startup to maturation and it’s special to be a part of that. Building systems and processes for a business of Gojek’s scale and complexity is a challenge one rarely enjoys in their career and I’m grateful for the opportunity.”

#asia, #ecommerce, #gojek, #indonesia, #logistics, #on-demand, #ride-hailing, #severan-rault, #southeast-asia, #tc

On-demand storage startup MakeSpace picks up another $55M

Sheltering-in-place and working from home curing COVID-19 has driven many of us to reorganize and de-clutter our living environments, and today one of the startups that is capitalizing on that trend is announcing a large round of funding to continue its growth. MakeSpace, an on-demand storage company that makes it easy to order, store and retrieve your physical belongings (also providing the muscle — that is, people — to help you do it), has closed a $55 million round — $45 million in equity funding and $10 million in debt — led by Iron Mountain, an existing investor and strategic partner whose primary focus is storage for larger businesses.

The funding is notable in part because of its size, but also because of the fact that it has happened at all.

On-demand storage startups have sprung up all over the world, hopeful that their new take on an antiquated, fragmented and valuable ($38 billion annually spent on storage) market would lead to big returns in a brave, new, Uberified world. But in reality, we’ve seen a lot of ups and downs, with various startups merging, closing, transferring and trying to pivot in the process. That’s left a consolidated space with fewer, hopefully better capitalised and better organised, competitors remaining. (Another biggie in this area is Clutter, backed by SoftBank and others, which has also been on a consolidation play as part of its growth.)

MakeSpace looks like it’s making a successful play to be in that group. This is a Series E for the startup — with other investors in the round including 8VC, Upfront Ventures, Maywic Select Investments, Ten Eighty, Provenio Capital, and CX Collective — and co-founder and CEO Rahul Gandhi said was at “a premium” to the valuation MakeSpace had in the last round of funding (a Series D that closed last year), without confirming either the previous or current numbers.

For some more context, PitchBook details what seems to have been a rollercoaster of valuations for the startup, which if accurate underscore some of those obvious challenges in this market. Update: Gandhi confirmed that the startup has now raised about $150 million and the valuation is higher than that.

MakeSpace itself has hit a number of milestones that point to its own growth. Last year, it added 20 new markets, bringing the total to 31 in North America, and doing so in a cost-effictive way. While one of the biggest costs (and stumbling blocks) for storage services to date has been grappling with building real estate businesses, MakeSpace has leaned on the infrastructure of its strategic investor Iron Mountain to bypass that challenge (and reduce those associated costs).

Gandhi said that it’s been outpacing “even our strongest forecasts,” with growth north of 30% on its targets, and he said the company has tens of thousands of customers using its service, which is priced in tiers starting at $69/month.

And while you might assume that a lack of house moving might mean less activity for storage companies, it seems the opposite is the case: MakeSpace and others like it have been designated “essential services” and its services have been in demand for people who are looking at their living spaces — and the prospect of spending significantly more time in them doing more than just watching Netflix, eating and sleeping — with new eyes. And ditto small businesses that are moving out of premises, even temporarily, or needing to rejig their environments because of distancing rules.

What’s also notable about MakeSpace is how it organises its workforce. While many on-demand businesses today have scaled by using an army of contractors, and all the complexities that this brings into the equation with regards to employee protections and benefits, MakeSpace has hired only full-time people, using its own team and those employed by Iron Mountain.

“They can get wonderful packages and all the benefits and perks to keep employee base happy,” Gandhi said. “It makes it easier to scale up the business and in terms of the hiring capabilities to help us scale.”

For a company built out of tech DNA — which is the other side of the business, involving smart logistics planning and storage optimising, and of course building it into an interface that can be used easily by workers and customers — workforce scaling and real estate/warehouse expansion are two of the biggest challenges in building on-demand storage businesses to compete with the heavyweights in the market, which include Public Storage, Extra Space Storage and U-Haul.

For Iron Mountain, it gives the firm, which focuses on enterprise users, a way to share in the revenues from tapping into the consumer market (optimizing use of its storage warehouses) without the costs of trying to service it directly.

“It has been amazing to see what MakeSpace has accomplished in the past year alone, growing from 4 to 24 markets almost overnight, and adding another 7 in 2020. They have taken a unique approach to storage that answers the modern customer’s demand for convenience, using technology to enhance the service and grow at an immense scale,” said Deirdre Evens, EVP and GM of North America Records and Information Management at Iron Mountain, in a statement.

“Especially now, services such as MakeSpace are delivering vital solutions for customers and businesses. MakeSpace has proven itself as an industry leader, finding new ways to offer support and services for this challenging time.  We continue to be both proud and excited about our partnership with MakeSpace and the opportunity to leverage Iron Mountain’s storage and logistics expertise to further penetrate the fast growing valet consumer storage market.”

Gandhi acknowledged also that while Iron Mountain is an obvious acquirer longer-term, it remains a minority investor.

“It’s really key that we remain independent,” he added. “We understand the strength of what they bring to table but in order for this business to capture major market share we felt collectively it was important for it to remain that way. At some point that discussion [on a bigger stake or acquisition] may happen but for now we feel incredibly good about what they are bringing to the table.”

#collaborative-consumption, #funding, #makespace, #on-demand, #recent-funding, #startups, #storage, #tc, #venture-capital