[The Turning Point] Inspired by ‘Uber for X’ concept, three IIT alumni started logistics startup Porter to solve challenges in intracity trucking market
Logistics-tech startup , which is backed by the likes of Tiger Global Management and Sequoia Capital India, was started as The Porter in August 2014 by IIT alumni Pranav Goel, Uttam Digga, and Vikas Choudhary, to change the fragmented intra-logistics industry by leveraging technology.
The Mumbai-based startup is a logistics marketplace that allows businesses to book vehicles on demand for completing intra-city logistics needs. At present, Porter works with ecommerce, FMCG, SMEs, traders, 3PLs, courier, and cargo companies. It has disrupted various domains of logistics by launching an on-demand marketplace for LCVs and bikes — Porter for Enterprise and Packers and Movers.
Bitten by the entrepreneurial bug, the founders were inspired by the ‘Uber for X’ concept seven years ago to serve consumers with on-demand services.
The co-founders studied the business model of Uber and similar companies, which were aggregating existing supply chains and matching it to demand in a much more efficient and effortless way by using technology. The trio did ground research on logistics in Mumbai and found a huge market gap in the last-mile delivery space.
File photo of Porter team (Image credit: Porter Facebook page)
While speaking to YourStory, Pranav recalls that in 2014, the intra-logistics industry was a highly fragmented market with glaring gaps in demand and supply, poor matchmaking, and low asset utilisation.
“With the existing challenges, the industry also lacked an ecosystem for smooth functioning of the entire logistics cycle. It was clear to us that only a tech intervention can fix the gaps. Hence, Porter was started to turn these challenges into opportunities and to leverage the promising intra-city logistics market in India,” he adds.
The industry had other challenges as well. Co-founder Uttam says, when they started Porter, they realised there were bigger complications on the partner side.
“We also unearthed some uncomfortable social stigmas, especially the ones related to the pain points about owning an LCV (Light Commercial Vehicle). It was this knowledge that changed the way we decided to solve the problem,” he adds.
Echoing the same, Vikas says that based on all these factors, the trio took a deep-dive to understand the partner problems and then created a marketplace that would create an efficient and reliable ecosystem in the industry.
“While the business and its stakeholders must create an effective economic cycle, the larger purpose for Porter over the years has been to create a social impact that positively changes the lives of every stakeholder in this journey,” he adds.
He says that the spirit and dedication to disrupt the industry and create a social impact became their turning point.
The constant evolution
However, the eureka moment or turning point according to Pranav was evolving the startup into a tech-enabled marketplace and creating an ecosystem in this space from being just an on-demand marketplace, connecting customers to drivers and improving both their visibility and efficiency.
“It is rare for startups to see their original thesis playing out,” says Pranav. “We were quick to realise that the major disruption in the industry was on the supply side and we need to shift our focus towards addressing those problems, thereby creating a strong impact on the demand side. This resulted in creating a virtuous cycle with strong network effects. The ecosystem paved the way for increased vehicle utilisation, better SLA (service-level agreement), and higher-income for its driver-partners. From the smallest to the biggest intervention, every step in our journey has been built around the ecosystem, with great focus on our supply side,” he explains.
According to the team, the drivers earn 30 percent more and customers save 20 percent on logistics costs, and have a better experience with lower wait times and higher availability.
Porter is also one of the only logistics models that is 100 percent asset-light and has a negative working capital cycle, as per the founders.
The startup, which was started with two vehicles in August 2014, is now present in over 13 cities across India, with more than 50 lakh customers and over two lakh owner-drivers on board.
Porter also claims to have consistently achieved triple-digit annual growth since its launch, and has been growing faster with scale as network effects play out.