[Tech30] How Delhi-based Ware is virtualising warehouse space in India
Story of an on-demand warehousing space startup Ware co-founded by three IIT-BHU alumni.
Businesses that are built to solve problems go a long way. Take redBus for example. When Phanindra Sama couldn’t go home for Diwali in 2005, he realised the massive information gap that exists in the road transport industry. When travelling from Bengaluru to Bandipur in a rented car turned out to be a bad experience for Bhavish Aggarwal, he connected with the travel woes of the multitudes and founded Ola.
Similarly, in 2015, Aditya Goel faced numerous issues that led him to start something new. Aditya, who was looking for the right warehouse partners for his company Ornate Solar, was off-put by the lack of transparency in pricing and operations in the warehousing industry. This is when he decided to start Ware — an on-demand warehousing solutions startup.
Along with his classmate from IIT-BHU, Rahul Raj, Aditya conceptualised the business model of Ware to help businesses of all sizes streamline their supply chain and reduce their warehousing costs.
This Delhi-based startup made it to the YourStory’s Tech30 list.
The problem and the solution
The warehousing industry is highly fragmented and there is no standardisation of costs. This means that businesses end up paying more than what they would in a perfectly organised and data-driven market. On the flip side, warehouse owners who have built capacity in the anticipation of demand are unable to get occupancy.
Ware solves the problem of managing inventory and supply chain for businesses. The company aims to 'virtualise' warehouse space so that
- businesses can dynamically customise their space requirements in line with their fluctuating needs and
- pay for only the space that they utilise as against being tied up with long-term, inflexible contracts.
It also helps warehouses gain visibility (and hence occupancy) by being an intermediary marketplace.
Revenues and traction
Ware has a dual revenue model:
- Supply side - Revenue sharing model with the existing warehouses to monetise their unused space.
- Demand side - With the provided flexibility in the duration of occupancy on the demand side — which guarantees savings vis-a-vis fixed warehousing contacts — there exists the opportunity to leverage the cost arbitrage that exists due to the fragmented nature of the industry.
Ware has a total of 8-10 clients and more than 300 warehouses on board. It aims to expand its operations to streamline the supply chain. It also plans to actively engage 1,00,000 sq ft of warehousing space on its portal soon.
Team and funding
At present, Ware is bootstrapped. Its eight-member team includes the three co-founders — Aditya Goel, Rahul Raj, and Arvind Jain —who are IIT-BHU alumni of the same batch. Aditya, with his strong background in sales, looks after getting customers on board. He’s the founder of Ornate Solar, a solar panel (and other solar products) distributor company, which has grown to become a Rs 200 crore revenue business in two years. Rahul Raj heads the tech division and has experience in data analytics. Arvind Jain, with a background in operations, looks after vetting and onboarding warehouses on to the Ware portal.
Others @ warehousing
Warehousing forms a crucial link in the overall logistics value chain. It accounts for five percent of the Indian logistics market (excluding inventory carrying costs, which amount to another 30 percent). The total market size of the warehousing industry, as of 2017, is pegged at Rs 750 billion.
The warehousing industry in India is highly unorganised and follows a free market system, which sometimes leads to price exploitation. There is no standardisation of experience across different warehouses. The industry has not witnessed any significant incursion of the developing technology. With GST, the warehousing industry is undergoing a shift with a possible consolidation of the warehouse space, in terms of location, size, operations, and services.
The existing online players are exploring the space with different sets of value propositions and service offerings which presently cater to business-to-customer (B2C) market that has consumers who require space for household items. Some of them are renting warehouses and further subletting spaces on per unit basis, while others like Ware are relying on asset-light business model. StoreSpace and Warehousewala seem to have the first-mover advantage in this space.