[Tech30] This Mumbai-based startup is consolidating the fragmented B2B marketplace for industrial products
Giant corporations and manufacturers need plenty of products for their everyday functioning – safety gloves, tools, chemicals, etc – to run their factories smoothly. But the market of these industrial products is completely fragmented, and companies deal with thousands of mom-and-pop stores to get their requirements fulfilled.
YourStory’s 2019 Tech30 startup Bulk MRO is trying to solve this problem of procurement for corporations. The Mumbai-based startup has aggregated over 5,000 brands and 1.5 million products to become a one-stop-shop industrial products marketplace of corporates.
“We supply any product of any brand as one supplier,” says Co-founder Devang Shah.
Founded in 2015, Bulk MRO has offices in over 15 Indian cities.
“We chose Mumbai to base our operations as being the commercial capital we have access to the largest corporate headquarters. Also, we have deep networks in the industry and the startup ecosystem in Mumbai,” Devang, 37, says.
Founders of Bulk MRO - Devang and Gaurang Shah (L-R)
A-team since day one
Identical twins Devang and Gaurang Shah never really left each other’s side. Raised in Mumbai, the brothers were always toppers in school and later received scholarships to study at the Asheville School in North Carolina. Post-high school, they got scholarships to pursue degrees in Finance at the Wharton Business School and Engineering at the Moore School of Engineering, at the University of Pennsylvania.
After university, Gaurang worked at McKinsey & Co in New York, while Devang worked at Wall Street at Deutsche Bank.
They then returned to India, and the duo was working in their family business, Gruppe Littlesilver, a consulting firm in the oil and gas, power and defense sector.
“While working in the family business on several large LSTK projects, we faced significant challenges in vendor management for long-tail procurement. Challenges on the supply side was leading to delays in project execution downstream,” says Gaurang. “That was where the idea got seeded that there has to be a better way to procure these standard, off-the-shelf products in a more efficient manner,” Gaurang explains.
Thus, Bulk MRO was born. MRO stands for ‘Maintenance, Repair and Operations Supplies.’ The startup focuses on large corporate customers that procure MRO products in high volume.
The current team strength is more than 160, including graduates of Wharton, Yale, IITs, and ISB, Devang notes.
Team Bulk MRO
Bulk MRO supplies to customers products that are usually referred to as the ‘Indirect Spends’, ‘Category C spends’, or ‘Miscellaneous Spends’ in the company’s finances. This includes products across categories, including hardware, tools, electricals, and office supplies.
Devang says Bulk MRO acts as a ‘master vendor’ to large corporate customers and manages the entire pool of MRO or indirect vendors through their platform. This, in turn, leads to eliminating several inefficiencies for customers, including reduction in order intensity, GST compliance, and wastage.
Customers have to interface with only one vendor - Bulk MRO, for all their requirements, which reduces the operational overhead. For example, they have to reconcile GST input credits from only one vendor. Moreover, the startup syncs up with the customer’s ERP system so that there is no change in the customer’s buying process.
Devang explains that by consolidating orders across multiple large customers, Bulk MRO is able to negotiate better rates across multiple brands. “These discounts are passed on to the customer,” he adds.
Bulk MRO works with large corporate customers across industries. According to the founders, they have over 250 corporate customers, 40 of which are Fortune 500 companies.
“We have been growing 3x year-on-year since the first complete financial year of operations. Almost 75 percent of our business is repeat,” says Devang.
Bootstrapped for the first two years, Bulk MRO raised an undisclosed amount from Y-Combinator in April 2017. Investors including Ace & Company, Bain Capital Ventures, FJ Labs,with a handful of other angels also participating in the round.
The startup makes margins on the difference in buying and selling price of the products it supplies. “We are running an EBITDA-positive business,” Devang adds.
Market overview and future plans
The Indian B2B ecommerce market is expected to reach $700 billion by 2020. Major government reforms such as GST, Make in India, and the push to digitise the supply chain have created opportunities for players to consolidate the highly fragmented supplier base.
“This is our Flipkart moment,” says Gaurang.
Bulk MRO competes with local mom-and-pop stores, and startups like Udaan, IndustryBuying, Moglix, Bizongo, Power2SME, and Ofbusiness.
“Each startup is trying to solve different problems of the supply chain. We are exclusively focused on solving sourcing and fulfilment challenges for large corporate customers in India,” Devang adds.
Bulk MRO is currently hiring across all functions to meet the demand and high growth velocity that they are expecting. “We are expecting a 15x growth in the next 18 months,” the Co-founder adds.
BulkMRO plans to expand to 20 more cities in the next 18 months, as they scale across their existing and new customers.
“We have changed four offices in the last four years. Some of our earliest offices were so tiny that if everyone including the field team showed up to the office, some of us would have to stand. Working literally shoulder-to-shoulder during those initial years has seeded a strong bond between the team members and has taught us to be frugal in our work and respectful to our peers while we march forward to capture this market,” Devang ends.
(Edited by Evelyn Ratnakumar)
YourStory’s Tech30 companies list is an annual selection of 30 carefully curated and disruptive tech-based startups that we believe will shape the new narrative for India and the world. To get a complete overview of the 2019 Tech30 companies list, download the Tech30 Report here.