This Singapore-based Logistics Start-Up is Betting Big on India
Grow Your Business, Not Your Inbox
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
Logistics start-up Ezyhaul started operating in India in 2018, two years after first launching its services in Malaysia. Within a year, India has become its biggest market in terms of revenue.
“A lot of start-ups start in a big country and then go to a smaller one. We did the opposite...we started in a small country, learned the ropes, knew what's working, what's not and then went to a big market,” says co-founder Mudasar Mohamed.
According to Mudasar, who was born and brought up in Bengaluru, it is unfair to compare the markets considering the size and population but the fact that the company already had an established presence in southeast Asia with operations in Malaysia, Thailand and Singapore helped the cause.
Despite competition in the market, having worked with some global clients who are present across these geographies, bagging contracts in India was relatively easier, he says.
The company provides everything from intra to intercity logistics services.
Mudasar and co-founder Raymond Gillian chanced upon the idea of digitizing the trucking industry after they both moved to Singapore from the US as part of the same logistics firm. Uber was just taking off then, and while there was someone doing the same for trucks in the US, the southeast Asian market seemed like the one that they could disrupt.
In all of these markets, there existed the concept of brokers who would connect clients with truck owners or companies that employed them, but the problem, according to Mudasar was that it was completely manual. “We said let's bring technology into this industry and kind of integrate everything,” he says.
With the third co-founder Nicky Lum joining, they managed to get the first few orders from people they already knew considering their experience in the industry. The challenge was to convince truck drivers and companies to adopt technology.
“Trucking by itself is a very antiquated industry, whether you're in Germany or Singapore or Sweden or the US...I feel like tech touches logistics last,” says Mudasar.
Over time, they introduced different features into their system, learning from the feedback from their clients.
After successful stints in Malaysia and Singapore, the company moved to Thailand before setting its eyes on India.
Challenges in India
One of the biggest challenges in India is the unorganized nature of the trucking industry, says Mudasar.
Even though it is unorganized abroad as well, there are trucking companies and small transporters which make it easier. In India, 70 per cent are single truck owners.
Mudasar says that creates a problem in terms of pricing, as most companies that give them orders work on a contract basis where the prices are fixed. The same, however, cannot be true for the shippers in India as their charges vary depending upon various factors.
With more data flowing in, they have begun to analyze patterns using technology and pricing the contracts accordingly.
The company also deals with problems like making sure that the drivers are trustworthy and wouldn’t get involved in trouble.
Ezyhaul has a one strike policy when it comes to compliance.
Apart from compliance and pricing, one of the other main challenges that the Singapore-headquartered company faced in India was that almost 60 per cent of the drivers did not have smartphones.
To solve this problem, the company formed two plans: one was using the GPS tracking that some trucks had in-built, and the second was by tying up with a few major telecom operators and triangulate their location based on any phone.
Earlier this year, the company announced a Series B fundraise of $16 million and said it would use those funds to expand into more markets in south Asia.
A few weeks ago, the company launched in the Philippines and Mudasar says they are also looking at Indonesia as a potential market but that would depend on how they are doing in existing markets.
In India, which has become their biggest market in so little, Mudasar said they are looking to hire talent for the tech team, which has largely been done from Malaysia so far.
In terms of revenue, the company gets their orders from the clients at a price and then goes to the drivers and trucking companies to negotiate. Ezyhaul is also exploring other revenue sources since they now have a platform with roughly 10,000 trucks on-board.
The company has tied up with certain insurance, telecom and fuel operators to offer value added services to the transporters.
“We have almost become like a channel partner for these large corporates who want to offer services for these fleet owners,” said Mudasar, adding, “Transportation has always been our bread and butter, but then we are also evolving into other streams of revenue through this model.”
Is profitability on the cards? They are close to breaking even in Malaysia and India, says Mudasar.
“The way we are going we think that in at least two of our countries, we are going to be profitable by Q1 (2020),” he says.