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Sequoia-Backed Logistics Upstart RoadRunnr To Reportedly Exit From E-Commerce Delivery Business

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Times are tough people — specially for companies even remotely related to eCommerce (and of course the eCommerce ones as well). On that note, RoadRunnr, the hyperlocal delivery startup backed by Sequoia Capital and Nexus Venture Partners, may exit from the e-commerce delivery business completely, according to a report from LiveMint.

The report — based on sources privy to the matter — states that the company may stop delivering products for eCommerce companies and instead, will shift its focus on relatively smaller number of, and rather more profit generating categories, including food, groceries and merchant-to-merchant, or first-mile deliveries.

If the reports are to be believed, it looks that the company had pretty ambitious plans for the e-commerce business. One person aware of the matter told Mint:

They were planning to scale e-commerce like anything. E-commerce deliveries were to be scaled up to 80% of the total deliveries, but with funding constraints, plans have been reset.

A few months ago, RoadRunnr came out with a new product named ‘Mailbox’ in order to help e-commerce companies cut out on missed delivery cost. It was helping e-commerce brands reduce almost 20% of the entire losses they make. But that clearly hasn’t worked out.

Also, company’s inability to raise further funds (a reason attached to almost every shutdown we have seen so far) could be a major reason behind RoadRunnr’s decision to shut down its e-commerce vertical. It has been in talks with multiple investors, including Milner’s DST Global, to raise close to $25-50 million in fresh capital, but has failed to close deal.

The company counts India’s biggest e-commerce companies such as Flipkart Ltd, Myntra and Snapdeal among its clients. Close to four months ago though, it misplaced products from Myntra worth about Rs.30 lakh and ended up paying a hefty fine.

The report also suggests that the company is looking to explore additional revenue sources through offline advertisements and promotions for its partner merchants. It is also exploring plans to launch bike taxis. But, it is yet to decide whether it will launch a consumer-facing platform or forge a partnership with other bike taxi start-ups by giving them access to Roadrunnr’s existing pool of delivery personnel.

It is also making efforts to cut the cost of delivery. Food delivery category of the company accounts for close to 80% of its overall orders.

In an email response to Mint, company’s spokesperson said:

We are not closing down e-commerce deliveries. We are doing bit of realignment around doing more first-mile than last-mile and due to this we are closing some localities and opening others that make more sense in terms of first mile.

Last month, it was reported that RoadRunnr and TinyOwl could be looking at a merger in an all-stock deal to come out as an integrated hyper-local delivery service. However, nothing further is known about this development and whether it was actually true.

Founded in February 2015 by Mohit Kumar and Arpit Dave, RoadRunnr is focusing on business-to-business deliveries. It makes use of an on-demand model to partner delivery boys and manage lean and peak demand, and charges businesses a flat rate per delivery. It handles about 12,000-15,000 orders a day.

So far, the company has raised around $21 million in 3 funding round. In June 2015, it had raised $11 million in Series A round from Sequoia Capital, Nexus Venture Partners and Blume Ventures and in October 2015, it raised $10 million from Sequoia Capital and Nexus Ventures.

We’ve mailed Roadrunnr regarding this particular development, and will update this story if we receive a response.


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