Delhi-based hyperlocal logistics startup Turant Delivery has ceased operations less than two years after its launch, with a deepening fund crunch and failure to raise capital rendering the business unviable.
Run by Always Turant Delivery Pvt. Ltd, the startup was in talks with multiple venture capital funds to raise about $2 million in a pre-Series A round, but couldn’t close the deal.
“Its high working-capital business was the main reason [for the shutdown]...Backing the increasing working capital demands was tough and external investment was necessary. We didn’t want to burn money blindly. The B2B model demanded heavy working capital and that sort of kept the VCs away,” one of the founders told VCCircle confirming the shutdown.
Turant Delivery had so far raised around Rs 1 crore in seed funding from a group of investors.
The startup was co-founded by ISB alumni Satish Gupta, Ankur Majumder and Siddharth Arora. It employed a zone-based pricing algorithm, providing small and medium businesses with rates that it claimed were at least 15% lower than market rates. It also helped truck-owners manage inventory.
However, the B2B model wasn't the company's original business—it was a pivot from its initial business-to-customer (B2C) service. Turant operated across Delhi, Mumbai, Bangalore and Kolkata and had a small unit in Surat. It employed about 25 people at the time of shutting down.
The company had almost sealed a deal to acquire Bangalore-based rival Zippon in September 2015, but it failed to materialise. Zippon eventually closed down operations in February last year.
The on-demand delivery space has seen several startups trying to find their feet. However, their performance has been mixed—while some managed to raise venture capital, the majority have failed to find the right business model for positive unit economics.
Chennai-based hyperlocal delivery and logistics startup Genie resumed operations recently after raising $250,000 from a group of investors. The firm, which was founded in early 2015, had shut down in March-end due to lack of funding.
In June last year, on-demand logistics provider Parcelled pivoted its business model, outsourcing its delivery services to third-party vendors.
In December 2015, e-commerce focused logistics services provider Delivree King had closed operations as it was unable to raise fresh funding.
Another logistics startup, Pickingo, was acqui-hired by Shadowfax in November 2015 after it stopped operations. Pickingo had raised $1.3 million in funding from venture capital firm Orios Venture Partners and Toppr.com co-founder Zishaan Hayath in August. In 2014, last-mile delivery startup Chhotu.in, which was backed by Paytm’s Vijay Shekhar Sharma, closed operations.