Ecom Express experience

All the founders have worked in logistics space before. For example Krishnan, CEO & co-founder, Ecom express says he spent 25 years in the space. There is nothing he knows other than logistics. He was heading ecommerce logistics set-up at Blue Dart before he quit and started this firm.

2012 - Four founder quit their job at Blue Dart and started the firm with Rs. 7 crores (Rs. 5.5 crores from Oliphans Capital, an early stage investor and the rest from founders).

Early 2014 - Ecom express was delivering in 60 cities. The founders did not want to raise equity capital so soon. 'We wanted to have traction and show our business to people before we hit the market.' says Krishnan.

The founders decided to borrow money from the market. Krishnan pledged his house in Delhi. They also borrowed from an angel investor. They managed to borrow Rs. 4 crores.

June 2014 - Raised around Rs. 80 crores from Peepul capital

Once the money came, they expanded to 200 cities from 60 cities. Deliveries increased from 45,000 in June to 120,000 by October.

June 2015 - Announced funding of Rs. 850 crores from global PE firm Warbug Pincus.

Other notes:
- Krishnan says that logistics market is huge
- It can support 4 or 5 big players
- In China, there are many multi-billion dollar logistics companies
- He says ecommerce companies could eventually focus on marketing. Logistics companies will take care of logistics, even warehousing. Even for big firms like Amazon and Flipkart.
- His comments on hyper-local delivery logistics
Companies need a density of orders and order size beyond Rs 500-600.
This business needs lot of capital till the companies grow.
My view is companies should not focus on multiple cities. They should take one city at a time and then go to another city to replicate it. You can't have burn rates in multiple cities at the same time.
- They should focus on one city, build the infrastructure, delivery points, have their own people to handle delivery, only then this model works.
- This is a highly capital-intensive business and thus break-evens take much longer. The gestation period could be 6-8 years.
- Only when the order density improves can the business become profitable, until then companies need lot of capital.

http://www.livemint.com/Companies/4akh4nn0zJ2b8AtDKo6dlM/Ecom-Express-Cashing-on-the-ecommerce-wave.html