Logistics solutions provider Locus targets two million orders a day by 2019

Locus is a decision-making engine that incorporates various business rules and fuzzy real-world scenarios like traffic delays and capacity constraints while planning and dispatching orders

In the wake of a nationwide uproar after an Uber driver raped a passenger in Delhi in December 2014, Nishith Rastogi and Geet Garg developed RideSafe, a real-time route deviation detection application for women’s safety. The application, however, was a hit among food tech companies. 

Surprised, the duo, who earlier worked for Amazon, noticed that the companies were not using the app to track their delivery fleets, but for the alert, it generated in case of any route deviation. This rang a bell. Rastogi and Garg gathered that while there are many systems to track the delivery truck, none provided the information where it should have been. 
 

Finding a gap in the market, they, in 2015, launched Locus, which seeks to be the algorithmic supply chain officer of large enterprises. “Locus aims to automate all human decisions required to transport a package or a person between any two points, delivering gains along with efficiency, consistency and transparency,” said Rastogi.

Locus is a decision-making engine that uses deep learning and proprietary algorithms to provide intelligent route optimisation, real-time tracking, insights and analytics, beat optimisation, efficient warehouse management, vehicle allocation and utilisation, intuitive 3D packing, and measurement of packages. The system incorporates various business rules and fuzzy real-world scenarios like traffic delays and capacity constraints while planning and dispatching orders.

The Bengaluru-based start-up recently raised $4 million in its pre-series B round of funding from Rocketship.vc, Recruit Strategic Partners, pi Ventures and Hemendra Kothari of the DSP Group. Previous investors Blume Ventures, Exfinity Venture Partners, BeeNext and growX ventures also participated in the round.

Locus co-founder and CEO Nishiith Rastogi 

 

“Logistics accounts for 10 per cent of the world GDP and is a direct contributor to inflation. Fortunately, by increasing data availability on operations, it is now possible to use technology for impactful logistics optimisations. Locus’ sophisticated AI engine has delivered 10 per cent-15 per cent cost reduction in real-world scenarios across the globe,” said Manish Singhal, founding partner, pi Ventures.

According to Rastogi, “Scheduling, managing and tracking logistics operations is a common problem being faced by several companies. The technology that existed was not up to the mark. With Locus, we deliver end-to-end logistics automation and aim to minimise human intervention at each mile of the supply chain.”

While there are players in the industry who offer enterprise resource planning (ERP) solutions which either solves the ‘knapsack’ problem (load balancing) or the ‘travelling salesman’ (route planning) problem, Locus claims to help solve both of these together or separately.

The key product differentiators are route planning engine and 3D packing for efficient packing configurations for loading cargo into containers.
 

Even users are impressed by its features. “Using Locus, we are able to simulate multiple what-if scenarios and then take larger business calls... Locus has a clear interface for easy adoption and usage. It has helped improve productivity by 25 per cent in three months,” said Kaustabh Chakraborty, senior vice-president (operations and supply chain), Urban Ladder.

Opportunity
 

Currently, according to Rastogi, India’s logistics industry is worth $300 billion. Also, the logistics industry is likely to grow at a compound annual growth rate of 13-15 per cent by 2020, while the Indian markets would grow at 10 per cent year-on-year.

The logistics market currently accounts for around 13 per cent to 15 per cent of the GDP on various costs incurred in logistics and transportation operations. This cost incurred is substantially higher when compared to other developing nations.

The global logistics market is set to reach $15.5 trillion by 2023. 
 

Locus competes with large enterprise players like Oracle Transport and Ramco Systems, but the most important competition is the human intuition that local intelligence competes with.

Locus co-founder and CTO Geet Garg

Revenue model

“Locus charges a percentage of the money it saves for customers, which is modelled either as per delivery or per vehicle charge... We have grown 500 per cent y-o-y,” said Rastogi. Locus is operationally profitable and is currently reinvesting profits for business expansion and building intellectual property (IP).

Road ahead 
 

The target customers of the company are medium to large enterprises. Locus has a customer base of over 40 such enterprises.
 

“We are expanding in North America and Southeast Asia. By 2020, we plan to enter the European and South American markets,” Rashtogi added.
 

The company handles about 250,000 to half a million orders a day and has set a target to handle two million orders by the end of 2019. It a plans to clock a revenue of $100 million globally in the next five years. 

Kushal Nahata Co-founder & CEO, FarEye

EXPERT TAKE 

‘A constant need to adopt a flexible solution’ 

India spends about 13 per cent of its GDP on logistics. It needs technology to reduce the cost of logistics and improve reliability in goods move-ment. Getting the spend down to 12 per cent can save about $10 billion. 

The situation demands a reliable solution that gives businesses complete visibility of their processes and at the same time can lower the cost of logistics. Being an ‘operations’ heavy industry, there is a constant need to adopt a flexible solution. Global software products have not been successful to solve India-specific challenges and this creates a big opportunity for Indian start-ups to build products to improve India's logistics. It's good to see the attraction that FarEye, Locus, and others in the space are receiving for solving a real problem for the country.  No one solution fits all, hence the industry needs to constantly innovate and think “why” they are building the solution and not “what” they are building.