Truck aggregator Lynk Logistics steers SMEs and individuals in their last-mile connectivity

The Chennai-based startup is helping direct the unorganised trucking business with better asset and driver utilisation.

At a glance

Startup: Lynk Logistics

Founder: Abinav Raja and Shekhar Bhende

Year it was founded: 2016

Where is it based: Chennai

The problem it solves: Solving the local logistics problems for businesses and individuals across cities

Sector: Truck aggregator

Funding: Funded by Ramco Group and Vinod Dasari, MD of Ashok Leyland

In today’s cities, while Uber and Ola are solving one part of the transportation problem, intra-city logistics has largely remained unorganised. As a result, booking cabs has become a breeze, while figuring out options to move a company’s goods from the warehouse to the store, or shifting one’s wares to a new office are still difficult tasks. Intra-city logistics is a nightmare especially for small and medium-sized enterprises (SMEs) and individuals in India.

The intra-city last-mile connectivity is a segment that is largely untapped by the digital economy. Though a number of startups have emerged recently to solve this problem, many of them shut shop or merged with rivals either due to lack of funds or due to a lack of strong technology platform. But a few persist and are still serving the sector, one of them being Chennai-based Lynk Logistics, founded by Abinav Raja and Shekhar Bhende.

The beginning

Both founders are alumni of Northwestern University, Chicago. When Shekhar (26) was in Pune for a wedding, he experienced first-hand the difficulty in shifting goods around. Back in the US, he discussed it with Abinav (24), and they decided to plunge into the intra-city logistic business in India.

The duo returned to India in 2015. “We started building up in small way by working on the platform and model,” explains Abinav, adding that they spent the initial 2-3 months studying the market and building the technology platform. “We spent the first half of 2016 just doing data testing with a few customers and drivers, and eventually launched the operations in June 2016,” he says.

It wasn’t easy starting up in the space. The founders had to deal with questions on speed and timeliness of operations, as they had only few trucks on board initially. “They also had concerns regarding the drivers’ reliability, theft and damage of goods. The sales cycle were longer initially. It took us the first few months to get these initial customers on board,” he adds.

How Lynk works

Lynk operates just like a cab aggregator, wherein it partners with truck owners who attach their trucks with the platform. The startup’s app has over 3.5 lakh downloads so far. The app is available for iOS and Android as well.

Individuals and SMEs looking to shift their goods and furniture can book a mini-truck (typically 0-4 tons) for their logistics requirement. The driver or truck owner benefits from higher capacity utilisation of truck through more trips. The fare structure is transparent and is framed to encourage efficiency from both the parties. The platform, in turn, charges a percent of commission of the fare. Abinav says, “The commission structure was set on right expectations and is reasonable even five years down the line”.

On its app, cashless payment can be done through Lynk Money and other features include ‘track your truck’ and ‘get fare estimate’ for customers.

Journey so far

Starting with aggregating just a few trucks at the beginning, Lynk now boasts of having more than 5,000 driver partners. It has operations in Chennai, Hyderabad and recently started operations in Mumbai as well. While Chennai has more than 2,500 driver partners, the rest are in Hyderabad and Mumbai.

Delving into revenue and growth, Abinav notes, “We are growing at 15-20 percent month on month. In Chennai and Hyderabad, we are already operationally positive (unit economics). Till date, the platform has seen more than four lakh transactions,” adding that the company has tripled its revenue in the last one year.

While the average driver utilisation is 1-1.5 trips per day in the industry, Lynk is having an average driver utilisation rate of 3.5 trips per day, Abinav explains. Eighty percent of Lynk’s revenue comes from SMEs and kiranas, and 20 percent from individuals. The company also claims that while average market driver earns is between Rs 30,000- Rs 35,000 per month, most drivers at Lynk earn anywhere between Rs 40,000-Rs 45,000.

Team

Lynk has more than 140 employees spread across three cities of its operations. Ramaswamy Shankar, COO of Lynk, was a former VP at TaxiForSure. The Chief Product Officer is Ramkumar Govindarajan who worked at Rocket Internet in the past.

Competition

Unlike the cab aggregator sector, there are no established players in this sector of intra-city truck aggregators. Although a lot of companies have started up in the sector, it’s still a very early stage. “It’s still a very fragmented sector and there are only one or two players emerging now. India is a very big market and there is no one who is operating in all major metros. And if you look at overall transactions in these cities, I would say that we are slowly gaining more and more market share in a place like Chennai and Hyderabad. The industry is still evolving and in the next one or two years, the logistics industry would attract a lot of interest and investments,” says Abinav. The intra-city logistics market is estimated to be around $10 billion in India and a majority of the demand is in Tier I cities. The market is driven mainly by individual owner-cum-drivers and SMEs.

Future plans

Lynk expects to expand to all major Tier I cities in next 12-18 months. “But before going to other cities, we want to go deep into every city. We want to make sure that we are not inch deep and miles wide. We have a very strong growth rate of 15-20 percent and if we can maintain similar growth rate by launching in new cities, we would be happy,” Abinav says.

The startup wants to gain a good market share in Hyderabad and Mumbai as well. “We want to be able to drive utilisation for drivers and assets there and at the same time ensure on-time availability of trucks at a good price,” Abinav adds.