RaRa Delivery ’s enthusiastic goal is to offer same-day deliveries in Indonesia without burning cash like many on-demand logistics providers. The business announced today it has raised $3. 25 million in seed funding light emitting diode by Sequoia Capital India’s Surge program and East Ventures. Other participants included 500 Startups, Angel Central, GK Plug and Play and angel investors Royston Tay and Yang Bin Kwok.
Launched in 2019, RaRa Delivery relies on a proprietary engine that batches orders and optimizes delivery routes based on data like real-time traffic information. It currently operates in Greater Jakarta and gets ready to expand into five other Indonesian cities this year.
RaRa Delivery’s goal is to integrate with all major marketplaces in Indonesia, so sellers could possibly offer it as a delivery option to customers. It also partners with brands, small ecommerce businesses and seller aggregators. Some notable clients include e-commerce platform Blibli, coffee delivery startup Kopi Kenangan, Grab Merchant, healthcare platform Alodokter and grocery store Sayurbox. RaRa Delivery says its daily order volume has exploded 15 times over the past year, due in part to increased demand for grocery and medical supply deliveries throughout the pandemic.
Before launching RaRa Delivery, co-founder and ceo Karan Bhardwaj worked at Unilever, managing its e-commerce supply chain in Southeast Asia and Australasia. During that time, he dealt with many kinds of distribution channels, including marketplaces, e-commerce aggregators and last-mile delivery providers.
Over the past few years, Bhardwaj watched customer expectations for deliveries change. Many are no more satisfied with even next-day delivery. They want their orders delivered the same day, often in just a few hours.
“A good experience over time becomes a need rather than luxury, ” said Bhardwaj. The United States has Amazon Prime, China has courier service SF Express and South Korea has Coupang, but “same-day delivery adoption hasn’t reached its true potential in Indonesia because of the insufficient the right supply solution, and that’s exactly what we are wanting to crack. ”
Bhardwaj added that people are willing to pay 2-3 times more for same-day delivery versus next day delivery, and even higher fees for deliveries within an hour.
But many old-fashioned logistics players, with their hub-and-spoke distribution models, are not created for on-demand deliveries, while on-demand providers have high operational costs because their drivers fulfill one order per trip.
“If a business has 10 orders, they are going to send 10 drivers and everyone is going to get one order, ” said Bhardwaj. “They can do a three-hour delivery service, but there is no consolidation, no optimization, the cost per order is quite high, there distance limits, weight limits and they don’t offer cash on delivery. ”
RaRa Delivery’s real-time batching engine was created as a more scalable and sustainable alternative. The company’s driver fleet fulfills orders for many different types of businesses—food and beverage, grocery, healthcare and e-commerce—which all have different time requirements for their deliveries. For example , a restaurant needs deliveries to happen within an hour, but for grocery stores that timeframe can be three hours, and for e-commerce stores, up to eight hours.
Once orders are made, RaRa Delivery’s system groups them into batches, optimizing capacity, distance, time slots and driving routes predicated on real-time traffic data. A batch can have between two to 15 orders, and their composition is flexible. For example , some batches may possibly entail a series of pick-ups accompanied by deliveries, while others might have pick-ups interspersed with deliveries, depending on what creates the most efficient route.
Bhardwaj said this increases simply how much RaRa Delivery’s drivers can earn because they perform multiple deliveries per trip, and reduce their downtime. Each RaRa Delivery batch takes about two to six hours to complete.
“In a normal on-demand scenario, a driver takes an order, finishes that order and waits for yet another order. That waiting time is what reduces the potential earnings of a driver, ” he said.
RaRa Delivery also enables cash on delivery. Typically, when a delivery service offers COD, meaning drivers need to go back to a hub to drop off the cash. RaRa Delivery’s reconciliation product shows drivers how much cash to collect for each order. Once they are done, it generates a code that the driver may use a convenience store to deposit the cash, instead of a hub.
The startup’s plans for its seed funding include expanding its product ecosystem, which currently includes the batching engine, a seller portal, real-time order tracking, a chatbot for customers and the COD reconciliation.
It’s focused on Tier 1 cities in Indonesia for the initial rollout, before expanding into smaller cities and covering all of Indonesia in just a couple of years. Then RaRa Delivery plans to expand into other countries. Bhardwaj said its batching engine is geography-agnostic, so it requires minimal localization for new markets.
