ElasticRun is fulfilling India’s quick commerce appetite with last-mile delivery solutions
The last mile delivery of logistics in India is now focused on speed and ElasticRun is geared up to fulfill this growing demand with its tech stack emerging as the key differentiator.
A visually-impaired person approached last-mile delivery service provider ElasticRun to be part of their network. The Pune-based company was hesitant to hand over the work. However, he convinced ElasticRun by highlighting his strong local connects.
Today, ElasticRun says he manages one of the best fulfillment networks for the company.
This story is one among the several examples of how ElasticRun has not just taken last-mile delivery for logistics beyond the metros and into hinterlands of the country but also built a tech platform that is accessible to anyone. Its 50,000-strong partner network can use its services entirely using just a smartphone.
Founded in 2016 by Sandeep Deshmukh, Saurabh Nigam and Shitiz Bansal, ElasticRun has been able to synchronise the three pillars of any logistics network: real estate, transportation and vehicles onto a technology platform that has enabled it to scale to over 1,000 fulfillment centres spread across the country.
The starrup's network of warehouses and fulfillment centres with sortation capabilities. It completes over five million daily shipments and has a presence in 22 states connected to over 600 towns and cities.
In an interaction with YourStory, ElasticRun founder and CEO Sandeep Deshmukh said, “Our idea was to use technology to build a low-cost model of logistics and enable all these brands to reach the deepest parts of the country.”
It also helped that the founders had backgrounds in tech and logistics as they had worked in companies such as Amazon, Infosys, and DHL to name a few.
As Deshmukh puts it, “Our thought process at the time of founding was to bring all the elements onto a tech platform to build a capex light but high scale logistics network that can be leveraged by anyone.”
A unicorn, the startup has raised 462 million in funding from investors such as SoftBank, Prosus and Avataar Ventures. It has a wide range of customers including Amazon, Flipkart, Myntra, Ikea, Supertails, Croma, and Mokobara.
Over the years, ElasticRun has navigated the various phases of logistics: it started by catering to ecommerce companies followed by fast moving consumer goods (FMCG) corporations. Today, quick commerce is driving its business.
In this whole process, ElasticRun’s network has moved beyond the metros and into semi-urban and rural areas. The startup scaled quickly between 2016 and 2019, driven by ecommerce and during the post COVID-19 pandemic era when the FMCG companies pushed demand.
According to Deshmukh, the company has built a solution that can provide connectivity to any part of the country at the same cost irrespective of the demand density.
The company has rewritten the rulebook of logistics as it no longer depends on a hub-and-spoke model—where products are consolidated in a central facility and moved to regional nodes—and instead has created a network that fulfills deliveries faster.
This nimbleness has helped it adapt to a quick delivery model. “Anyone who wants to launch quick commerce can ride on top of our existing logistics network to park their inventory with us and then reach their customers in a very short span of time," the co-founder says.
Beyond metros
Deshmukh believes ElasticRun’s strength lies in its last-mile logistics network which can handle high volumes at lower costs. This actually helped the startup expand to Tier II and beyond locations, including rural areas.
Here, the penetration of mobiles phones with an internet connection proved to be a gamechanger for ElasticRun as the entire last mile delivery could be done through a device. Additionally, it also turned many individuals from these areas into entrepreneurs as delivery also meant earning additional income. Today, there are scores of individuals who now receive a regular income and have also become part of the formal economy.
Tech stack
Technology stack, the company says, has helped it adapt to changes in India’s retail network. The startup runs its tech platform like a SaaS model where it is accessible by every individual on its network.
As Deshmuk puts it, at the core of its technology platform is a machine learning engine which keeps learning from past data and the predictions keep getting better.
At the same time, there are changes coming in through artificial intelligence (AI) and ElasticRun is adopting this technology which has led to higher efficiencies and better accuracy in its operations. Though Deshmukh believes the next “big thing” for the logistics industry would most probably be physical AI.
Plans ahead
ElasticRun is now engaged with ecommerce firms which also include quick commerce, FMCGs, and direct-to-consumer (D2C) entities. Established offline businesses that are keen to grow their online presence are among key drivers of ElasticRun’s growth.
According to Deshmukh, ElasticRun has established a multi-channel fulfillment network where even non-e-commerce companies leverage this to sell or distribute their products. “This year we are seeing a lot of pull from these players as they are trying to figure out ways to reach their customers faster,” he remarks.
At the same time, ElasticRun is very clear that it will run its business with a clear focus on unit economic profitability. Deshmukh said the demand for logistics is going through the roof but the supplies are not really catching up.
As part of its future plans, ElasticRun would look at penetrating further into the semi-urban and rural areas at a faster pace. “The shrinking of timelines is a big business opportunity,” Deshmukh said.
In the next 18 months, ElasticRun aims to transform itself into a fast fulfillment engine and along with maintaining the quality standards. “For now, our hands are full with catering to fast movement in the country,” Deshmukh said.
The market size of ecommerce fulfillment services in India is expected to touch $27 billion by 2033 from the level of $7.4 billion in 2025 registering a CAGR of 17.6%, according to Grand View Horizon.
Edited by Affirunisa Kankudti