Manish Agarwal, a New Delhi-based chartered accountant, was on a business trip to Mumbai when he had to make a difficult choice: head to his hotel to drop off his luggage or cart it around the megapolis.
“I was at the airport when an urgent meeting was scheduled in Andheri. But my hotel was in Colaba, about 30 km from Mumbai airport. Going to the hotel to leave my luggage meant I would be late for the meeting. There was no place to drop off my luggage and I had to lug it around to all my meetings that day. It was very uncomfortable,” Manish recalls.
After returning to Delhi, he spoke about this problem with friends and family. He soon realised that the absence of safe and affordable cloakrooms for temporary luggage storage was a common problem.
Manish and his former colleagues from Indiamart, Mukesh Goel and Vidyanand Tripathi, decided to solve this problem for travellers and conceptualised . They onboarded a mutual friend, Alok Goel, to handle the technical aspects of the platform.
How does it work?
Launched in 2019, Lugsto is a mobile and website-based platform that helps travellers find safe and affordable “cloakrooms” to stow luggage for a few hours or days.
The New Delhi-headquartered company has a network of 160 storage spaces across 40 cities, includes Tier I cities like Delhi, Mumbai, and Bangalore, and Tier II and Tier III cities like Guwahati, Indore, and Lucknow.
“Lugsto’s key clients are people who travel to different cities for work, exams, vacations, etc. and don’t want to book a hotel or a taxi solely for their luggage,” says co-founder Mukesh.
While Indian Railways offers cloakroom facilities at main stations, these are only for people who travel by train and have a valid Passenger Name Record (PNR). There are no government-operated cloakrooms For other modes of travel, be it buses or flights.
This is the problem Lugsto aims to solve by providing cloakroom-like facilities for all travellers, irrespective of the mode of travel.
“Customers who visit the website or mobile app need to enter a few details like the date and time of drop-off and pick up along with the number of luggage items to be stored. The platform then shows available options near the customer’s location,” Mukesh says.
Bootstrapped Lugsto does not own any facility; it ties up with hotels, shops, and offices that offer stowage in exchange for a commission that ranges from 30 to 50 percent, depending on the accessibility of the location.
Charges are based on the number of bags and the number of days the service is required. Prices typically range between Rs 40 and Rs 150 per bag per night. Customers have to drop off the luggage themselves at the selected location.
The platform offers features such as GPS navigation and insurance on baggage. Customers can pick up the luggage from the storage space only through an OTP, which should match the unique barcode assigned to the bags.
Lugsto has a team of 17 people, all based in New Delhi.
Challenges and the future
The team of Lugsto had its fair share of problems – from building the technology to ensuring the security of luggage and finding partners.
A year after launch, COVID-19 brought the world to a standstill and travel stopped completely. The stowage service was not needed at all, which translated into trouble for the founders.
“The first phase of the pandemic did hamper our business. But there is always a way to look at things differently and positively. We decided to work on technology enhancement and strengthen our partner network. When the lockdown lifted, our network helped us bounce back,” Manish says.
Lugsto competes with websites like Boxigo, StoreMyGoods, Stownest, and shares similarity with Nannybag, a mobile and web-based platform that helps travellers drop off their luggage during short visits to cities like London, Brussels, Lisbon etc.
However, Mukesh says the startup stands out as the platform is accessible both as a mobile app and a website, allowing travellers to book cloakrooms from anywhere in India.
According to filings with the Registrar of Companies, Lugsto made a revenue of approximately Rs 3 lakh as of March 31,2021.
A report by Markets and Markets says the global smart warehousing market size will grow from $14.8 billion in 2021 to $25.4 billion by 2026, at a Compound Annual Growth Rate (CAGR) of 11.5 percent during the forecast period.
Lugsto aims to tap this demand.
Its future plans include providing a “cloakroom” in every locality, so that the service is “accessible in five minutes”.
By 2024, the team aims to have a presence in 110 locations with 1,000 stores and introduce a plan for luggage pick-and-drops. “We also plan to expand outside India,” co-founder Manish Agarwal says.
