Kolkata-based Obo believes on-demand concierge service is the need of the day

Kolkata-based Obo believes on-demand concierge service is the need of the day

Wednesday July 18, 2018,

4 min Read

In a world running against time, Obo is an on-demand, specialised delivery service that gets anything you need delivered to your doorstep. 

At a glance: 

Startup: Obo

Where it is located Dubai and Kolkata (operations)

Founders: Saurav Jhawar and Madhuri Chalke

Year it was founded: 2017

Sector: Hyperlocal delivery 

Funding: Bootstrapped 

In this TLDR (Too Long Didn’t Read) world, time truly is money. A cab service that takes more than five minutes is too long a wait, and food delivery beyond 30 minutes is unimaginable. Looking at this, Saurav Jhawar decided to start Obo. 

His premise for Obo is that it helps you get everything you need, delivered to your doorstep. Working as an on-demand personalised delivery service, Obo offers on-demand delivery, reverse deliveries, and even first and last-mile logistics

It also takes care of delivery requirements of local businesses. Obo’s local delivery network and logistics technology helps merchants deliver to their customers in a cost-effective way. 

Getting started

When Saurav first started, he began by delivering to residential complexes in South Kolkata. He soon realised how daunting the task was without a fleet of delivery executives. 

“With the lack of adequate funds, making the idea a commercial success was nearly impossible. But I wasn't ready to give up. I spent five years in Dubai working in a different industry till I had acquired sufficient capital to get back to my first entrepreneurial venture with full throttle,” Saurav says. 

After coming back, he was joined by Madhuri Chalke, an architect by profession as Co-founder. Starting with four to five bike rides, the team began operations in Kolkata. The company, registered as Obo Cabs in Dubai, has 45 bike riders operating in Kolkata currently.

Madhuri and Saurav, Founders of Obo

How does Obo work?

A user has the option to call the call centre, or leave a message, with their pickup and drop point, and time preference. Charges are based on per-kilometre slabs, and the rates are given beforehand. Once the user agrees on it, a confirmation message is sent and the nearest rider is assigned. Working like any hyperlocal model, existing delivery boys are on-boarded on Obo. 

“We work for convenience of our users, which is the most important thing for us. Even if a user wants us to shop for something, we allow the user to decide which store they want us to shop from. The user experiences a completely personalised feeling,” Saurav explains. 

Obo began operations last year, and the team currently is working on a mobile app. It claims to be making 8 to 10 deliveries every day, and growing at 15 percent month-on-month. The team is also looking to add four wheelers and on-board over 150 drivers in the next few months. 

Revenue and competition 

Currently bootstrapped, Obo charges per delivery with price slabs for 0 to 25 km and 25 to 30 km. The delivery fees are between Rs 60 and Rs 150, depending on distances. 

Apart from this, the company has also collaborated with Boda Boda Africa in Ethiopia for bike taxi services; they work on a commission basis for added revenue. A few months back, the Obo team claimed to have had a total revenue of Rs 450,000

Obo faces competition from Dunzo and Gojek. While Gojek doesn’t operate in India, Dunzo is present in Bengaluru, Gurugram, and Pune. Last December, dunzo raised $12.3 million in funding from Google; it was the internet giant’s first direct investment in the country

The market and future 

In the first half of this year, hyperlocal delivery startups raised $82.6 million in funding. MilkBasket kept the momentum going in early 2018, raising two quick rounds: $3 million in January (pre-Series A) and $7 million in May.

In 2015, a slew of hyperlocal startups in different segments like Doormint, Peppertap, Turant Delivery, and several others couldn't survive the funding crunch towards the end of the year and through 2016. 

Pranav Pai, Founding Partner, 3one4 Capital, believes the problem two to three years back was that not a single company was able to demonstrate margins with scale. He explains that when a company was covering one neighborhood or even a city, they had margins of 12 percent, but when they began to grow and expand that dropped to 3 to 4 percent. This made the business that much harder to run.

Obo has also tied up with home and women entrepreneurs for deliveries. “Our executives do it all - from buying raw material for the client, to delivering to the end user, and also collecting payments on their behalf. We have tied up with 65 bakers,18 home cooks, boutiques, and designers of handmade fashion accessories,” Saurav says. 

In the coming months, Obo intends to start operations in Chandigarh, Bengaluru and Mumbai. It will be interesting to see is how Obo brings scale in cities like Bengaluru, and how it takes on the existing competition.