Bootstrapped EV logistics startup Howdyy is helping Amazon, Bigbasket switch to green deliveries
Founded in 2020, Bengaluru startup Howdyy has tied up with Hero Electric, Ampere Scooters, Log9, and Bounce for fleet requirements.
While working in the engineering division of a diesel sales supplier, Aashirwad Deshmukkh had to send engine spare parts from one place to another. He says, “I realised that the process of booking a logistics vendor, getting driver details, loading and unloading, procuring documents like e-way bill, proof of delivery, and invoicing was a tedious and cumbersome process.”
He also witnessed first-hand the problems faced by grocery delivery executives. “To my surprise, delivery boys were spending more than 30 percent of their earnings on fuel, apart from day-to-day maintenance of the vehicles.”
Spotting a gap in the logistics industry, he decided to launch a platform to provide companies with an eco-conscious alternative for their delivery needs.
Aashirwad, along with his wife Aisshwaraya Deshmukkh and childhood friend Kannan Marimuthu foundedin September 2020.
The Bengaluru-based startup aims to be an alternative to ICE (internal combustion engine) vehicles in the end-to-end delivery space.
Operational in Mumbai, Pune, Bengaluru, Chennai, and Hyderabad at present, some of Howdyy’s prominent clients include Amazon, Blue Dart, Bigbasket, Apollo Pharmacy, 1MG, Porter, DMart, etc. The startup claims to be making over 3,000 deliveries a day and over 1,00,000 deliveries every month.
How does it work?
Howdyy provides tech-driven EV-led logistics solutions, which include first-mile service (movement of shipments from the warehouse to the distribution centre), mid-mile (sorting the packages as per pin codes and channelising them to local hubs), and last-mile service (delivering packages from local area hubs to the end-customer).
Speaking about how the platform works, Aashirwad explains that once the API is integrated into the platform of the client (like Bigbasket/Blue Dart), the orders received by these clients get pushed to Howdyy’s dashboard. The orders can be accessed by Howdyy on a real-time basis to enable the requirement of the delivery of non-essential items and other products.
The startup has 1,003 electric vehicles (EVs) on the ground at present, of which 725 are two-wheelers and 278 are three-wheelers. Howdyy doesn’t own any fleet, and the vehicles are on either lease or rental. While Howdyy uses 80 percent of its vehicles on a daily basis, about 20 percent of them are hired on an ad-hoc (need) basis.
The startup has tied up with Hero Electric, Ampere Scooters, Fae Bikes, and Bounce for its two-wheeler requirements, and has partnered with Omega, E-Treo, and Log9 for three wheelers.
Howdyy also provides a platform for drivers, where they can sign up by completing the necessary onboarding process on the platform. It also recruits, trains, and manages delivery partners.
“Through our lead management software, the selected drivers get a link on their registered mobile through which they can download the app and start the onboarding process. They have to upload the necessary KYC documents on Howdyy’s rider app and create an account. The Howdyy app will pull this data, perform a background check, and push it back onto Howdyy’s platform where the riders can see their status if they are selected or not,” says the co-founder.
Howdyy has a 20-member team where Aashirwad oversees the business and other managerial functions. Kannan is responsible for the overall operations of the company, while Aisshwaraya manages the marketing and branding.
The market and business
India’s logistics sector has started adopting EVs at a faster rate than expected. According to Redseer report, India’s last-mile delivery market is moving in a similar direction as China and the USA, where the penetration has reached more than 10 percent. Following this growth trajectory, India is set to touch a market size of $6-7 billion by 2024.
Depending on two or three-wheelers, the startup charges Rs 19 to Rs 70 per order for last-mile delivery. For the mid-mile or first-mile delivery, it charges per trip or per day basis, which is around Rs 1,200 per trip or Rs 3,000 per day.
The bootstrapped startup, which was started with an initial investment of Rs 1 crore, claims to have grown 9X since FY21, but the team refused to disclose its revenue. It also claims to be profitable.
Some of the players competing in the same space include the likes of Zypp Electric, Micelio, and Moeving.
“Our core differentiator is that we have built our tech in-house. The entire first-, mid- and last-mile delivery has been bought on a single tech layer,” adds Aashirwad.
Speaking of challenges, Aashirwad says, “Creating Howdyys’ brand trust and value in the market was the biggest challenge. Lack of good vehicle financing options for riders and winning riders' trust on EV’s was another challenge. With inadequate charging infrastructure, also building a strong profitable model around the EV delivery business model was a struggle.”
The way ahead
Howdyy plans to touch 10,000 deliveries per day in the next six months and increase the green warehousing model from one hub to 150 hubs at the same time. It also aims to expand to other places like Pune,Mangaluru, Goa, and other tier II cities in the next six months.
It is also planning to focus on partnerships to strengthen the EV ecosystem, says Aashirwad.
He adds, “The success of the EV-led logistics sector depends on the ecosystem developed around it, including partnerships, sourcing the partners, two and three-wheeler rentals, vehicle maintenance, financing partners, etc. The ecosystem must innovate and develop to make a stronger base. Howdyy is open to collaborating with companies in the ecosystem for services like fleet management, hiring vehicles, hiring delivery partners, charging infra, etc.”
The startup has also been one of the few companies to be selected for Newchip Accelerator programme, one of the top-five accelerators in the US," says Aashirwad.