In 2013, LogiNext founders Dhruvil Sanghvi (CEO) and Manisha Rai Singhani recognized an e-commerce trend beginning to unfold: hyper-local commerce.
Companies like Uber and Door Dash were quick to jump into the fray, offering delivery and ordering options to established corporations that were eager to expand the reach of their services. It quickly became apparent that these third-party delivery options made it hard for companies like McDonalds and Starbucks to control the logistics of these deliveries while maintaining the integrity of their brand and sustaining their desired level of customer service.
Using their tech background, they developed a cloud-based solution that allowed these customers to offer an improved customer experience while reducing the overall cost of implementing their service. Their big-data experience has now allowed them to offer nine different delivery models in five arenas, and their efforts have not gone unnoticed.
I sat down with Sanghvi last week to discuss the impacts of COVID-19 on their business:
LogiNext Has $39M In The Bank, What Will They Do With It Considering COVID-19?
These are interesting times! Riding on the surge of deliveries that are a side-effect of the Coronavirus quarantines across the country, LogiNext is experiencing vibrant growth and an increasing popularity as their clients need to find effective ways to connect with their customers.
Dhruvil isn’t sharing all the details, but part of the plan for his war chest is to acquire two smaller firms – one in Asia to add talent to their roster and another in Europe to aid market expansion.
The Company Burns $200k/mo On What?
Staffing is on the rise, with the head-count at LogiNext doubling from less than 100 to a current talent pool of 200. Dhruvil expects that between their offices in the U.S. and Mumbai, LogiNext will have around 250 people on its payroll by the end of 2020. They anticipate that their burn will hit about $1M per month this year, but at the moment the $200K figure primarily represents payroll and infrastructure.
Why Customers Pay More Than $180K/Year
Their platform allows their customers to provide delivery service in five different areas: Last mile delivery (Intra-City: All models including door-to-door, hub-to-door, hub and spoke), Line Haul Movement (Inter-city), ad-hoc reverse logistics and pick-ups, along with analysis that delves deep into the figures around the customers’ delivery timings, distances, locations, and delay trend analytics.
The customer ACV has grown from about $25K to the most recent figure of $70K.
Their largest client is McDonalds, which they brought on board after UberEats lost their account in 2018.
LogiNext Revenue Churn Only 5%, Expansion 40% For Net Revenue Retention of 135%
While churn isn’t exactly desirable, LogiNext’s ability to maintain a high revenue retention alongside consistent expansion makes the 5% churn rate interesting. Where other firms might view churn as a measure of weakness, LogiNext’s minor churn rate tells a story that’s more about adjusting their services to find perfect fit with their existing customers than it is about overall client dissatisfaction.
LogiNext Was Valued at $100M in last $39M Series B Round
LogiNext was first funded by an angel investor, Indian Angel Network, with USD$500K in 2015. Later that year, their Series A funding netted them $10M in USD. After gaining McDonald’s as a client and boasting a valuation of $100M, LogiNext received their Series B round of funding to the tune of USD$39M
If their business continues to expand this may be a rare case where you see a massive round of funding at a premium valuation even as the rest of the world stares down a recession.
Meet LogiNext CEO Dhruvil Sanghvi
- Favorite Business Book: The Hard Thing About Hard Things – Ben Horowitz
- CEO who’s career he’s following/studying: Jack Ma – AliBaba Group
- Favorite online tool for building his company: [I can’t understand this – Zo?]
- Hours of sleep per night: 8
- Marital Situation: Married, no kids
- Age: 30
- What do you wish your 20-year-old self knew: Start as early as possible
Data points to fill in Revenue:
2015
2016
2017
2018 – approx. $7M
2019 – $15M
2020 – Projected at nearly $30M by FYE 2020
Customers:
2015 – Approx. 40+
2016
2017
2018 – 50 customers
2019 – 100+ customers
2020
Funding:
2015 – $10.5M ($500K angel investor followed by a $10M Series A)
2016
2017
2018
2019 – $39M (Series B)
2020
Team Size:
2015
2016
2017
2018
2019 – Approx. 90
2020 – 200 (soon to be 250)
