COGOS has raised $2 Mn in its Pre-Series A round, led by Dubai-based Transworld Group and New York-based deeptech fund Worldquant Ventures
Besides expanding overseas, the company will look to further strengthen its technology stack, which drives its SaaS platform
Competing with the likes of Rivigo and Blackbuck, COGOS is looking to generate 30% of its overall revenue by 2023 or 2024 through electric vehicles
The direct-to-consumer (D2C), hyperlocal delivery and ecommerce boom in India over the past two years has meant that ecommerce ecosystem companies such as logistics tech players have also widened their repertoire and array of services. Now, companies are ready to take the lessons learnt from playing a part in the growth of D2C brands and startups in India to international waters.
Bengaluru-based startup COGOS is one logistics tech player that is looking to cross over from India and seek success in overseas markets. The company has raised $2 Mn in its Pre-Series A round, led by Dubai-based global shipping and logistics player Transworld Group and New York-based deeptech fund Worldquant Ventures among other investors. Transworld Group’s Ritesh S Ramakrishnan will be joining the COGOS board with this round.
Founded in 2016 by Prasad Sreeram and Dr Rama Mohan Katta, COGOS is a logistics tech platform which targets intracity businesses that operate their supply chain on trucks or smaller commercial four-wheelers and three-wheelers.
COGOS Takes Indian Lessons Abroad
Sreeram told Inc42 that having established a network of 300 operational cities in India, this is the right time to look to expand abroad. While he didn’t specifically mention the countries or markets, the idea is to go to markets that have a similar appetite for logistics tech and ecommerce solutions as India, and where the Indian diaspora has a significant presence.
“The changes in the Indian market have definitely opened up doors for online trade and commerce to keep growing, and logistics players have relied on leveraging the latest technology to win. This can be scaled for other markets. I believe what we have developed for India is suitable globally, but we are looking at markets that need digital transformation just like India,” COGOS cofounder Sreeram said.
Besides expanding overseas, the company will look to further strengthen its technology stack, which drives the shipping and logistics management SaaS platform, providing customised tech solutions for companies based on their intra city logistics needs.
Sreeram was confident that domestically, the growth of ecommerce in Tier 2 and 3 India will continue to offer B2B logistics players opportunities to find niches and grow. “There are plenty of challenges to be solved and we need to ensure that logistics infrastructure can be expanded to even more remote areas, as that offers a great opportunity for deeper use of tech.”
In the past it raised $1 Mn from Indian Angel Network (IAN), Emergent Ventures and angel investors such as Padmaja Ruparel, Saurabh Srivatsava, Anukur Jain, Charles Owen, Niraj Saran, Raman Roy, Suresh Kumar, Farhat Ali among others.
Rising D2C Tide Lifts Logistics Tech
In terms of the logistics management software, COGOS offers a delivery management system that businesses use to book trucks, and manage the movement of cargo which also includes live tracking. They can also get electronic proof of delivery to thwart theft and protect against other incidents in transit. Businesses can also keep track of their trucking expenditures through a dedicated dashboard.
Speaking about how D2C brands have leveraged COGOS, the cofounder said that businesses can plan, schedule, and dispatch goods intelligently to save costs on shipping, which is a major overhead for D2C companies and sellers on ecommerce. “Typically, D2C brands want full control of their operations so the SaaS solution is ideal for them. Given the competition in some categories, a lot depends on the backend supply chain, how well they are able to deliver it.”
Brands can select their targeted cities or metros, what kind of volume they are looking at and then COGOS suggests the kind of vehicle and fleet needed for the operations. This is more flexible for smaller brands that have low capacity or when brands experience seasonal surges. Besides this, it also works with marketplaces and logistics tech majors such as Flipkart, Amazon India, Udaan, Delhivery, BigBasket for city logistics.
As highlighted in our recent report, India is home to more than 800 D2C brands, and most of them are witnessing a spike in demand even from Tier 2 and Tier 3 cities during the pandemic-induced lockdown last year and this year. Amid this boom, the other big focus for COGOS is electric vehicles for city logistics.
It has roped in OEMs to provide electric three-wheelers for commercial usage. In June, COGOS said it will augment its fleet by 2500 EVs in Bengaluru, Hyderabad, Delhi Gujarat, Maharashtra and Tamil Nadu.
COGOS claims its AI-driven logistics SaaS platform, which will integrate EVs into the delivery process, will have significant environmental and social impact. The investment from WorldQuant is a testament to the technology that the company has built, Sreeram claimed.
COGOS lets businesses choose vehicles as per their needs and offers them a choice of EVs, highlighting the savings to the business owner. This helps in driving adoption of EVs and as a result the entire logistics industry will benefit, since everyone is moving to transition to electric vehicles. The goal for COGOS is to generate 30% of the overall revenue from electric vehicles by 2023 or 2024.
Competing With Trucking Unicorns
COGOS competes with logistics tech and trucking unicorns such as Rivigo and Blackbuck which have a wide presence around India and the globe. Like COGOS, these companies also offer solutions such as vehicle analytics, route planning, human behaviour analysis, auto-alert systems and insights for decision making .
Sreeram believes that there is a wide scope for more players despite the presence of heavyweights, because no one player can win this market. He said most trucking companies focus on metros for city logistics, given the higher volume of business there. That’s understandable but COGOS is targeting smaller cities and towns along with the metros, which the company believes is a big enough differentiator in a massive market such as India. And the experience of working in smaller cities will also help COGOS break through in international markets where logistics tech penetration may be low.
The company’s revenues are said to have doubled in the past couple of fiscals, despite Covid, Sreeram said, adding that the current annual revenue rate is $7 Mn right now, which is expected to go higher during the upcoming festive season in India from October onwards. On a transactional level, the company claims to be unit economic positive and Sreeram said that the plan is to use this round to scale-up and achieve further growth before going for a Series A soon after.
