In developing countries, with disorganized delivery markets, last mile logistics is often a concern. However, in India, a new intra-city logistics startup is helping customers move goods as easily as they book cabs. What’s more, it has fixed prices, verified drivers who are conversant in basic English, and real-time tracking of deliveries…all at the click of a mouse!
The startup driving this revolution is Blowhorn—the Michael & Susan Dell Foundation’s latest investee. The foundation announced that it would invest $1.25 million in the organization earlier this month, together with IDG Ventures India and existing investors, Draper Associates and Unitus Seed Fund. Blowhorn plans to use this investment to expand to eight Indian cities and employ more than 25,000 truck drivers over the next 24 months.
The idea: Using technology to increase efficiency
Blowhorn makes the fragmented intra-city logistics market (estimated at USD 10 billion) more efficient by connecting mini truck drivers to the demand for deliveries via an app. Partner drivers can now use their mobile phone to access work orders or follow the most optimal transport route to their destination. Thus, improving capacity utilization and income of partner drivers.
Besides its innovative technology solution, Blowhorn also has a strong people focus. Partner drivers receive training on customer orientation—making it possible for them to move from product transportation to product delivery, thereby enhancing their income. By organizing and skilling this informal sector of micro entrepreneurs, Blowhorn is enabling aspirational jobs and meaningful careers for underprivileged youth within the logistics industry. All the while doubling the income of drivers on its platform.
By organizing and skilling this informal sector of micro entrepreneurs, Blowhorn is enabling aspirational jobs and meaningful careers for underprivileged youth within the logistics industry. All the while doubling the income of drivers on its platform.
The impact: How will Blowhorn help?
A major challenge in India is providing market relevant skills and meaningful jobs to a young and growing population. Skill training has helped employ poor urban youth, but the shortage of well-paying and aspirational entry-level jobs has created large-scale unemployment. Over the last decade, 150 million youth have entered the job market, however, our estimates show that only 60 million jobs have been created. Hence micro-entrepreneurship is critical to address this demand- supply gap. Blowhorn provides us with an opportunity to overcome this problem of unemployment and underutilization among underprivileged youth in the logistics sector through its technology platform.
To ensure that Blowhorn continues to fulfil its social mission, the foundation will also track the success of the organization along several parameters like the number of registered drivers, percentage of active drivers, average income of drivers, income increase for drivers, and percentage of drivers who have bought an additional vehicle after using the platform.
The investment: Why we chose Blowhorn?
Blowhorn provides a strong investment opportunity due to its ability to create jobs and livelihoods, improve drivers’ incomes, deliver promising financials, and offer an innovative business model. The following factors played a decisive role in our investment in the organization:
- Quantifiable results: The drivers usually report an increase in income of 80–100 percent after using the platform. This is driven by an increased number of working days, efficiently planned driving routes that reduce errors, and regular payments.
- Market-ready method: Blowhorn’s technology creates significant efficiencies in an existing market value chain and it currently operates in three metros. It has also built strong partnerships with leading companies in the country through innovative campaigns such as 1-hour delivery of mobile phones.
- Exceptional team: Mithun Srivatsa and Nikhil Shivaprasad are exceptional co-founders committed to building a sustainable business. Mithun brings over seven years in the logistics industry and has worked at leading companies such as Maersk, Google and British Telecom. Nikhil spent six years in the technology industry and returned from Silicon Valley to build Blowhorn’s cutting-edge logistics platform.
The investment represents our entry into the informal and unorganized livelihoods sector—covering workers who do not have social protection and organizations that are not formally registered with the government.