Startup Mantra: Sustainable last mile delivery service
As increasing demand for the last mile delivery puts pressure on the quick commerce sector in cities, this startup comes up with a novel way to ease the load as well as provide jobs to people from semi-urban and rural areas, while reducing the carbon load
Problems abound or existing solutions can be made better, and therein lies the beginning of a startup. Like most young men, Amit Batwalkar, who’d completed his mechanical engineering from MIT, Pune, started his career with a job. He worked first with No Broker and then with Uber Eats and as any professional would expect, did well. “I was looking into the rewards programme for the delivery personnel and understood the nitty-gritty of the quick commerce business,” he said.
He was posted in Mumbai and his father, Amarchand Batwalkar, who is now also his co-founder used to tell him to either join his company (interior design for industrial units) or start on his own. “My father wanted me to join his business. However, I was into logistics and understood the ins and outs of this business. Logistics is one of the fastest growing sectors in our country and is the backbone of every business.”
How it started
Amit started Battu Services in 2021 to cater to Zepto’s delivery needs in the Hinjewadi area. At that time, COVID-19 had wreaked havoc in the quick commerce sector, and many delivery boys were either jobless or had left for their hometowns. Given his experience, he understood the difficulties a delivery man had to go through as well as the demands of the business, which were not necessarily well synced. Customers wanted their parcels delivered at odd hours that were not necessarily a typical 9 to 5.
Amit, with his deep experience, found a solution. He says, “I come from Vengurla in Konkan, where jobs are generally available mostly during tourist season. So I got people from smaller towns where jobs were not easily available. I approached Zepto and started at Hinjewadi with three members of staff from my hometown and two from Pune.”
Teething problems
But that gave rise to another problem. The problem of getting people for the job on hand could be solved, but where would they stay? Rent is not easily affordable, especially if you are starting out from a small town and moving to a big city. Amit thought of renting out PG accommodation for the three men. “And since they did not have a vehicle, which is absolutely necessary for the business, I hired EV bikes for them,” he said.
Paying for rent, food and hiring bikes would reduce his profits. Says Amit, “The understanding with the staff was that I would help them for 42 days after which they will have to pay for their rent as well as pay me back the rent I paid in instalments. Since they all start making money from Day 1, it worked out quite well.”
His profit comes from the 10% commission he takes of the total invoice amount from the companies he is serving. At that time Zepto had a high attrition rate of 13%. Amit’s business hinged on the success of these deliveries (literally and figuratively). While the cost of rent (for both rooms and bikes) added to his total cost, the efficiency of EVs coupled with his commitment to the environment helped delivery partners save up to ₹3,000/- on fuel every week “Generally EVs require less maintenance and the running cost is very low. If a petrol-driven bike will cost 2.5 litres of petrol for 120 km, an EV bike costs just two units of electricity which will cost ₹8 for the same distance.”
While sustainability was a great goal and he did his bit with low moving vehicles (LMVs), problems began to crop up. “Our LMVs started developing problems. They had a gap between the front and back seat and that caused water to enter the battery area causing damage. Which caused downtime.” It was obvious that Battu needed high moving vehicles (HMVs) that performed better.
Solutions come at a cost
With technological advancements came better EVs. In 2022 Ampere Magnus two-wheeler EVs were launched by Greaves Electric that was an HMV. Says Amit, “These EVs were an improvement on the old bikes, they had no gap between the front and back seats and gave 75-85 km per charge. But they cost ₹1 lakh each.” But Amit was committed enough to his sustainability goal to make that capital investment. He bought five Ampere Magnus HMVs in 2022. While he paid for the rent for his outstation delivery staff he took rent for the EVs that he initially hired and later added capacity by purchasing five.
By 2023 Amit had a fleet of 30 EV bikes. He has now invested ₹72 lakh so far with a further purchase of 67 bikes in 2024. He runs a tight ship as he initially did all the tasks himself. “When I started I was handling the tele calling, pay-outs, marketing, supervision, everything myself. It is only now that I have hired eight people to help me. We serve Zepto, Big Basket, Jio Mart, Dunzo and BlinkIt.”
Making it work
Demand, supply, attrition, sustainability and profits, making them all work in a perfect synchronicity is what makes any business successful. Amit understood the problems the delivery app companies faced and also understood the issues with the feet on the street. Not only were the PG accommodation, the rentals for the EVs as well as payouts he received working well, but he got a grip on the human side of his business.
“Any business is about people. Generally, a person is allotted anywhere between a three to seven km radius that he serves. After completing a delivery, he goes back to the dark store that is situated at the centre of the pin code to collect his next order. Though these dark stores are air-conditioned, they do not allow the delivery staff to rest there as there is a hygiene issue - muck from the shoes or water from raincoats dripping in the stores. Often they have to sit outside these stores come rain or sun. That gets uncomfortable.”
To help with this Amit has devised a two-shift per-day work schedule. “My staff will work for four to five hours after which they will go back to their PG room to rest. At this time, they can also recharge their EV batteries and return for the next shift. This helps the staff, helps recharge the batteries and improves productivity.”
Funds
As of now, Amit is completely bootstrapped. His father’s advice is deeply embedded in his head. “He had told me when I set out to buy my first EV that I shouldn’t invest in anything until I have an MVP. I had some savings and with my father’s help, we invested a total of 73 lakhs in our business. Currently, we have revenues of ₹1.5 crore and are making 8% profit. I have no plans yet to raise funds. Once our profitability is a bit high then we will get into fundraising.”
The way forward
As of now, Amit has 77 EVs that he purchased. He plans to take that number up to 200 by March 2025.
“Each EV pays for itself in 11 months and as of March this year, all my bikes have paid for themselves. However, last year I came up with a solution to my heavy capital expenditure. I know quite a few EV bike dealers and I gave them an idea that would work for them as well. I realised that I could buy these EVs at a second-hand rate and suggested to some dealers to offer an exchange deal. I bought their second-hand EVs while they got a new one. Instead of paying ₹1 lakh per bike I could now get one at ₹20,000-25,000 per vehicle. Since all EV bike batteries come with a warranty of 5 years or 50,000 kms I could always get the battery changed if it gave me trouble.”
Out of the 77 people working for Battu Services, 35 are from outside Pune. Amit got the management of Zepto involved in his outstation hires as well. “Most companies have to deal with high attrition rates. So we have now jointly started Saksham, a rural management program, where together we are now sourcing staff from Odissa, Madhya Pradesh, Uttar Pradesh, Bihar, and Jharkhand. We also have 45% of our riders from Maharashtra’s remote areas like Parula, Akkalkot, Nashik, Amravati, and Umberkhed. These men earn about ₹20,000-25,000 per month which is almost four times what they can earn in their hometowns.”
With a goal of 1 million EV bikes in the quick commerce sector by 2030 and capturing 20% market share, it is quite certain that Battu Services will need to raise money. Amit started this company with deep insights into the Quick Commerce sector coupled with empathy for the delivery partner and the environment as well. Though he has come a long distance since 2021, he has miles to go as he says “I want to be a 100 per cent EV delivery service company.”
Looks like it won’t be too long before he does that.
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