How StoreSpace bagged big-ticket clients like Coca-Cola within six months of starting operations
While working with Barclays Investment Bank, Pune, Tanya Singh travelled quite frequently to Bengaluru. Her brother, Pushkar Singh, Co-Founder and CEO, LetsTransport.in, had just started his venture around that time and she used to help him with multiple client visits and interactions.
During such meetings, Tanya came across many businesses that take up warehousing space based on peak requirements and pay for the entire space, even when it is not required. About 84 percent of the industry was fragmented. This had Tanya's interest piqued, and she wanted to explore offering need-based, cost-effective and aggregated warehousing solutions. So, last December, she launched StoreSpace in Bengaluru along with her friends Sunil Indoria and Neelabh Tewari, alumni of IIT Kharagpur.
While working in Samsung, Sunil also realised that digital storage is quite seasonal as demand for these services keep varying throughout the year. Similarly, Neelabh also faced significant storage issues while working in ITC factory.
Currently, our focus is on seasonal and bulky products belonging to industries such as consumer durables, engineering goods, FMCG, e-commerce etc., which account for $4-billion market with 680 million sqft space,” says Tanya (27), a Computer Engineer from College of Engineering, Guindy Anna University.
Establishing the proof of concept
Storespace has been bootstrapped with the founding team's personal savings. Within six months of operations, Storespace has managed to acquire 15 clients across retail, manufacturing and food & beverages. The client lists comprises players like Coca-Cola, Zefo, Rentomojo, OfBusiness, UrDoorStep, CityFurnish, Stitchwood and Furlenco.
StoreSpace enables organisations to use centralised and distributed facilities as per their convenience within one contract. The company also provides 24x7 physical security and camera surveillance, and offers delivery within 24 hours of request.
“Technology is the core of the company, which helps to provide flexible and shared warehousing solutions to their customers and differentiates them from old third-party logistic players,” says Tanya.
Building marketplace for warehouses
StoreSpace provides end-to-end warehouse management solutions to enterprises. Enterprises, in general, face volatility or variations in the nature of the sales cycle. The startup helps forecast requirements and procure need-based, cost-effective, flexible warehousing solutions and prevent businesses from incurring high capital expenditure.
StoreSpace is working on a full-stack solution having products like intelligent sourcing application, enterprise dashboard, workflow management application and on-demand booking application.
Currently operational in Bengaluru, Tiruchirappali and Hyderabad, StoreSpace has a team of 20 members. It is growing at a rate of 75 percent month on month and earns revenue of Rs 20 lakh per month.
The revenue model comprises warehouse rental and provision of ancillary services like warehouse and inventory management solutions. Currently, StoreSpace partners with landlords, warehouse service providers (WSPs) and businesses who list their warehouse space on Storespace's platform.
We will aggregate demand in these warehouses and collect rent from the clients for the space which they use actually. We will keep a portion of this rent as service fee and pass the rest on to the landlord,” says Tanya.
Storespace charges a service fee to the clients for providing end-to-end warehousing management services. It plans to raise funds within the next six months, and have approximately two million sq.ft. of assets under its management. By the next fiscal, StoreSpace aims to earn a revenue of Rs 10 crore.
Tapping the huge market
Many entrepreneurs spend sleepless nights at the thought of pouring significant working capital in inventory management and thereby eroding the profits. Proper control over inventories decides the balance between production and distribution process. Unsold old inventory if not moved on time may lead to damage and obsolescence.
Industrybuying.com, a B2B marketplace selling industrial products to SMEs; Delhi-based Surpluss.in, which deals with overstock and branded surplus products; and Bengaluru-based Buildkar.com are some startups addressing this problem in the past few years.
A B2B construction goods marketplace Buildkar raised an undisclosed amount in seed funding from Meher Group CEO Mustafa Wajid and Gaadi.com Founder Umang Kumar. Industrybuying raised Rs 12 crore from Trifecta Capital.
The Ministry of Micro, Small and Medium Enterprises reported that there are 36 million small units in India. Most of them are buyers and sellers of various industrial goods contributingto the growth of B2B e-commerce. According to consultant firm Ecumen.in, the B2B segment in India is set to grow by 2.5 times, to touch Rs 45 lakh crore by 2020.