Gurugram-based bike taxi startup Baxi has raised an undisclosed amount of fresh funding from multiple investors, a top executive at the firm told TechCircle.
Baxi’s co-founder Ashutosh Johri said that existing investor Alok Mittal, co-founder of fintech startup Indifi Technologies had put in money. New investors who also participated in the round were Ramesh Awtaney, founder and chairman of information technology firm ISON Technologies; Mohit Khurana and Deekshant Sahrawat, co-founders of Roots Education; and Ashish Chhaparwal, founder of US-based children transportation firm KidzJet, he added.
According to Johri, the bike taxi startup is now operationally profitable.
Baxi will use the capital to launch its hyperlocal ordering app for groceries, personal care products, pharmaceuticals, health supplements, food and dairy products, Johri explained.
The startup has partnered with fast-moving consumer goods player Patanjali for hyperlocal delivery. As part of the tie-up, Baxi will provide Patanjali’s employees with bikes at all its retail outlets. Besides delivery, it also helps the employees earn extra income, Johri explained.
Customers can order from the nearest Patanjali store through the Baxi app, which can be downloaded from the Google Play Store or the App Store.
“This scheme will make home delivery extremely efficient and affordable for Patanjali customers. Store executives will make the deliveries on their own bikes, making this faster and more efficient than existing home delivery solutions,” Pankaj Swadeshi, head of stores at Patanjali, said in a statement.
Johri added, without disclosing their names, that Baxi will also partner with three to five other national retail brands by the end of the month.
Most last mile delivery companies incur losses because the delivery cost is not fully recovered from the customer, he said.
“Delivery boys require at least Rs 1,200 per day or 20 deliveries at Rs 60 for the aggregator to make profits. Store employees (of Patanjali), on the other hand, only need to earn more than the cost of ownership of their bikes, which is barely Rs 100 a day or 5 deliveries at Rs 20. They also get to keep the bike for personal use during their time off. This model has been working for Baxi even in non-metro areas with individual stores and can easily be replicated in smaller towns,” Johri elaborated.
Incorporated as 74 BC Technologies Pvt. Ltd, Baxi was founded in 2014 by Johri and Manu Rana, both alumni of IIT Delhi. Prior to setting up the bike taxi startup, Johri worked with Cisco, Mara Ison Technologies, AT Kearney and IBM, while Rana, who is also a graduate of the University of Toledo, was with Bigtree Entertainment, IgniteWorld and Match.com.
The startup last raised funds in November 2015, when it secured $1.4 million in seed funding from a group of high-net-worth individuals. It operates its services in parts of Haryana and Uttar Pradesh.
Deals in the bike taxi segment
In the past two years, dozens of bike taxi startups sprang up across states but many shut down due to lack of funding, operational challenges and regulatory hurdles. Cab-hailing firms Ola and Uber also offer bike services in some cities.
The most recent development in the space was in May this year when Bengaluru-based Rapido acquired Hyderabad rival Getbike to enter the business-to-business segment.
In January, Delhi-NCR-based Bikxie had raised Rs 2 crore ($315,200) from GEMs Partners, a micro venture capital fund, and Sachin Khandelwal, the former chief executive and managing director at non-banking finance company Magma Fincorp.