Jugnoo riding on its B2B product to turn Ebitda-positive

After breaking even, start-up will have enough to pay for expenses, sourced from B2B product

Jugnoo, a hyperlocal start-up offering services rides, ready-to-eat food, grocery and restaurant food delivery, is betting on its business-to-business (B2B) logistics business to break even this year at the Ebitda or operating level. Ebitda is earnings before interest, tax, depreciation and amortisation.
 
In simpler terms, it means Jugnoo’s long-term cash inflow will exceed its long-term cash outflow. Once it breaks even, it will have enough money coming in on time to pay for expenses.
 
Jugnoo hopes to earn revenue of Rs 70 crore in FY18 and turn Ebitda-positive. ‘‘We have been able to turn our tech platform as a profit centre,” says Samar Singla, founder and chief executive officer.

 

Adding: ‘‘We have curtailed our burn, slowed our expansion speed in some verticals and focused on B2B business, where we see good realisation in on-demand logistics space.”
 
Jugnoo started as a ride-hailing app in Chandigarh for auto-rickshaws. It uses the same platform to offer a B2B product, Tookan, a field management and tracking device. It claims 17,000 clients in 150 countries. This business contributes 80 per cent of revenues and 95 per cent of profit. Founded in November 2014 by a handful of IITians, the auto-rickshaw hailing service has expanded into food, grocery and other deliveries in 35 cities. In July 2015, Jugnoo acquired Mumbai-based Bookmycab, bringing 4,000 cabs into its fold. Jugnoo claims to have 15,000 auto-rickshaws on its app, five million users and 50,000 transactions a day across verticals. It claims to be growing at 15 per cent a month.

 
“We have always believed in the significance of developing a scalable but sustainable business model. This achievement means a lot to us, as it reaffirms our faith. We have witnessed 250 per cent growth over the past one year and are on track to achieve net revenue of Rs 70 crore in the current financial year,” Singla stated last week.
 
Jugnoo has $16 million in funding across two rounds in as many years. Its investors include Snow Leopard Ventures, Paytm, Silicon Valley venture capital firm Rocketship and several angel investors.
 
Ride-hailing apps Uber and Ola have slowed their expansion and brought back surge pricing to make operations more sustainable. As a result, cab bookings fell five per cent between January and March 2017, Redseer Consulting said in its recent report on the space. Many drivers went on strikes to protest cuts on incentives by Ola, Uber and others.

 
Interestingly, while Uber and Ola focused on metropolitan areas, Jugnoo went after Tier-II and Tier-III cities.  ‘‘We operate in 30 cities but the majority of all our verticals are in 20 cities. Some of the top cities are Pune, Indore and Gurgaon,'' Singla said.