Indian logistics startup ElasticRun in talks to raise USD 55 million from Naspers

Logistics spend in India is 13%-14% of the GDP.

Source: Unsplash.

South African investor Naspers is reportedly in talks to invest USD 50 – 55 million in Indian logistics startup ElasticRun at a 250 million dollars valuation, with an intention to “double down on the investment in the next eight to twelve months,“ a source familiar with the matter told local media ET.

Naspers based its further investment intention on the startup’s business model which the VC fund deemed as the “most capital-efficient way to build a scalable technology logistics network in India,” according to the source.

ElasticRun, founded in 2016 by former Amazon India and Infosys alumni, adopts a business model that takes cues from the concept of the shared economy. Instead of operating its own warehouses, fulfilment centers, and delivery fleet, it aggregates spare logistics capacity from various businesses such as corner stores, local couriers, as well as SMEs to fulfil customer orders.

The company claims that this asset-light model could help reduce the heavy capital usually needed to build up a national-level delivery network and make better use of extra warehousing and delivery capacity from a variety of businesses that otherwise might be wasted during their non-peak time.

Its services apply to a wide range of industries, from consumer goods, online retail, manufacturing, automotive to hospitality.

The cost of using ElasticRun’s services is flexible and on a “per delivery” basis, given its aggregator hence flexible nature. Its platform could leverage a wide range of logistic capacity to cater to different clients’ needs.

ElasticRun’s latest funding happened last October, when Kalaari Capital and Norwest Venture Partners put USD 8 million into the Pune-based company.

Some of ElasticRun’s local rivals include Loadshare and Locus, backed by Matrix Partners and Tiger Global, respectively.

Logistics spend in India is 13%-14% of the GDP, according to a recent research report by accountancy Ernst & Young. The country’s logistics sector is highly fragmented and unorganized, translating a huge market potential for capacity aggregators like ElasticRun.