Exclusive: Zomato-backed Pickingo seems to be in trouble, halts hyperlocal delivery
After Localbanya and Townrush, hyperlocal B2B logistics startup Pickingo appears to be in trouble. The Gurgaon-based company has halted hyperlocal logistics services for retailers and restaurants. We spoke incognito to Pickingo executive inquiring possible partnership for restaurant delivery, however, the executive said the startup had stopped hyperlocal deliveries.
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According to the executive, the company continues to ensure deliveries for e-commerce players. Zomato had invested a small amount in Pickingo in September this year. According to YourStory sources, Zomato infused some cash against five percent equity in the company.
Pickingo raised $1.3 million led by Rehan Yar Khan of Orios Venture Partners along with participation from Zishaan Hayath in August this year. YourStory tried reaching Rahul Gill, Co-founder, Pickingo, over the phone but his number is out of service.
Launched in December 2014 by IIT-IIM graduates, Pickingo started with reverse-pickups for e-commerce players such as Jabong, Snapdeal, Shopclues, and Paytm among other across six cities. The company entered the on-demand hyperlocal delivery segment and claimed to power delivery of 300 restaurants, groceries, and pharmacies.
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The company was handling deliveries for Grofers as well. Grofers confirmed to YourStory that it had stopped working with Pickingo almost three months ago. The 11 month-old-startup is possibly pulling out from hyperlocal space in the wake of high burn rate and to improve its bottom line.
Prior to Pickingo, Townrush and Localbanya shut their operations after they failed to raise follow-on rounds. The unprecedented appetite for foodtech and hyperlocal startups from investors seems to have passed its crest on the pretext of scale and projected growth.
Startups who compromised on fundamentals to focus on scale, growth, future projections, and over-hiring are feeling the heat even as a cold front (winter) appears to be setting in.
Experts say figuring out unit economics in hyperlocal logistics is very tough. Customers in India typically don’t pay an additional amount for delivery and at those price-points, offering a delivery service for restaurants/retailers doesn’t translate into viable unit economics for foodtech and hyperlocal startups.
With Pickingo pulling out of hyperlocal delivery, Zomato can look into writing off its investment in the company. Zomato had invested in Pickingo and Mumbai-based Grab to streamline its home delivery part. On the lines of foodtech, hyperlocal is on its way towards consolidation and it would be interesting to track how overall hyperlocal evolves in the times to come.