In 2014–15, when Nishith Rastogi and Geet Garg, two friends with engineering backgrounds, teamed up to create an app for women’s safety, they didn’t know it would be used by food and hyperlocal delivery companies to track the movements of couriers.
The app was originally designed to continually check whether a cab driver is making unreasonable deviations from a route to the passenger’s destination. But it was picked up by delivery platforms that still relied on phone calls to ensure their employees were using specific roads and paths.
In the following months, they saw a surge in similar use cases. The duo realized they could develop a platform to streamline the services of delivery companies. “As there is disruption happening in the retail sector, with e-commerce and the hyperlocal delivery market becoming large, the complexity of the supply chain has increased. Now we see the involvement of multiple players like retailers, online marketplaces that take orders, and logistics companies. All of them need frequent decision-making and that is what we provide,” Nishith Rastogi, co-founder of Locus, told KrASIA.
In 2015, Rastogi and Garg created a set of APIs, a dashboard, and an app for that purpose. Rastogi said technology has always been used in supply chains, but people still had to make the decisions. “Our technology is focused on automating the human decision itself.”
“For example, if you had to deliver 10,000 grocery items to different locations, we can tell you which route to take, what kind of vehicles to use, in what quantity, and in which order,” he said.
Although a few clients signed up for the company’s services in its initial days, it took a large part of Locus’ first two and a half years, until 2016, to create the platform and fine-tune the product. It was only in 2017 that Locus began to actively pitch their product to logistics companies and technology startups that had to deliver physical products to customers. By 2018, the company had managed to wrangle several major clients, including online grocer BigBasket, Flipkart-owned fashion retailer Myntra, Lenskart, and delivery company BlueDart.
The company has a clear goal, one that investors from across Asia find appealing. In 2016, Locus raised USD 2.75 million in its Series A round led by Exfinity Venture Partners, with participation from Blume Ventures, Japanese VC firm BeeNext, and Rajesh Ranavat, managing director of Fung Capital. Three years later, in 2019, it roped in Falcon Edge Capital and Tiger Global to lead a USD 22 million Series B round in which existing investors also poured in more money.
Locus claims its clients save 10–20% in logistics costs after adopting its platform in their operations. “Logistics is super expensive for companies, so imagine savings in that range. Suddenly, we became a critical part for our clients,” said Rastogi.
Spreading wings
After Locus established a firm footing in the business, the company started to expand its product offerings, building upon its last-mile dispatching solution. “We also started helping companies to collect revenue from various mom-and-pop stores,” Rastogi said. Once businesses began using its services for one piece of the problem, it usually wouldn’t take long for them to fold in other solutions within their operations.
Now, Locus is even offering consulting services to its clients. “For example, if Brexit happens, how should I re-optimize my supply chain network so that my landing cost is still the same or even lower after the change in tariffs?”
In 2019, the company launched its solutions in five countries in Southeast Asia and set up local offices in Jakarta and Ho Chi Minh City. According to Rastogi, the region’s logistics problems are comparable to those in India, making Locus’ international expansion a natural fit. “Problems like incorrect addresses, dramatically varying traffic conditions, congestion, improper routing information make these two geographies very similar markets,” he said.
Its expansion in Southeast Asia was dotted with a few initial hiccups, including administrative issues and efforts to understand local logistics structures, such as getting the hang of street addressing systems. But when it came to applying Locus’ solutions for local companies, the technology platform could morph and adapt to various use cases.
The majority of the Southeast Asian market, Rastogi believes, is suffering from a lack of tech solutions for logistics. Since the region’s economy is growing rapidly, its businesses need to optimize the management of their throughput.
For example, Fastrata Buana, a logistics company, which is owned by the Indonesian behemoth Kapal Api Global, and delivers consumer products like coffee, cookies, and beverages, used to manually plan its delivery strategies. There were inefficiencies, like a lack of visibility for their salespeople at important locations, and their representatives weren’t able to visit business outlets to offer their services to new clients. Locus worked with the team and provided new beat planning software. After Fastrata Buana implemented Locus’ product, the company saved 30% in logistics costs and was able to boost its business volume.
Currently, Locus has a 12-member team working in its two offices in Southeast Asia, and it gets help from the senior executives who spend time there. The team in India also pitches in to offer assistance when needed.
Rastogi pointed out that the per capita income of most Southeast Asian countries is much higher than India’s, making the region attractive as a market. “Credit card usage is also higher in Southeast Asia. The population that uses credit cards and transacts on the internet is about 40 million in Southeast Asia—versus fewer than 20 million in India,” he said.
Locus claims to process two million unique deliveries a day across India and Southeast Asia. Rastogi said the latter market has become a significant stronghold for the company—it is already contributing close to 50% to its revenue. “Southeast Asia is potentially a large market for us and can overtake India. We will see over the next two years how that goes.”
This article is part of KrASIA’s “Startup Stories” series, where the writers of KrASIA speak with founders of tech companies in South and Southeast Asia.
