Ex-Amazonian’s stealth startup gets $2m seed funding to disrupt logistics

Photo credit: Lord Enfield.

Leading VC firms Kalaari Capital and Norwest Venture Partners have quietly made a US$2 million seed investment in a startup in stealth mode, according to Termsheet, an online platform for angel investing. The deal was done in May, but not publicized so far.

The startup named ElasticRun, founded in April 2015, appears to be building an Uber for logistics and delivery. Its website says “something awesome is coming soon… stay tuned.”

Its Facebook page lets the cat out of the bag. “ElasticRun is building next generation transportation technology that will power the ecommerce and distribution industry of India. It is headquartered in Pune with offices in Mumbai and Bangalore,” says its Facebook wall, which has a team picture with 26 members.

ElasticRun says it is currently working with a Fortune 500 ecommerce company for its last mile services. It is also working with a Fortune 500 pharma company for its national distribution. It enables its customers to build a distribution network on a pay-per-use basis.

See: How this pioneer built a SaaS hub in Chennai from scratch without VC money

Founder headed transportation tech in Amazon

The ElasticRun team. Photo credit: ElasticRun.

One of ElasticRun’s founders, Sandeep Deshmukh, was part of the core engineering team of Amazon India, before he quit in February. He was responsible for building transportation tech relevant to the Indian context.

His last position was head of ‘I Have Space’, a last mile delivery program being rolled out by Amazon India in partnership with over 10,000 mom-and-pop stores. They store Amazon goods in their free space and deliver them to customers within a radius of 2-4 kilometers.

Sandeep was developing a crowdsourced transportation channel as part of this program. This is likely to be on the lines of Amazon Flex introduced in the US late last year. It uses an Uber model to get drivers of self-owned cars to deliver packages.

ElasticRun appears to be building a similar app-based asset-light model for receiving orders and dispatching delivery drivers.

Amazon Flex was itself modelled on Postmates, a San Francisco-based logistics startup using the Uber model for delivery. YC-backed Rickshaw is another startup in this space with a slightly different model – it connects delivery partners with drivers and provides efficient bunching of orders and routing.

See: The former Microsoft director who tossed a coin to decide on his startup