After quitting same-day delivery and laying off staff, this startup pivoted to software

Zyllem’s Marco de Lorenzo (L) and Noam Berda. Photo credit: Zyllem.

When customers of ecommerce logistics startup Zyllem started getting emails about its services getting discontinued in Singapore, it seemed like curtains for the company. It turns out, however, that reports of Zyllem’s death were premature.

Zyllem, formerly RocketUncle, specialized in last-mile logistics. It used a combination of software tools and a fleet of delivery people to bring items to doors on the same day they were ordered, or at worst, the next day.

It was serving 30,000 customers, CEO Noam Berda tells Tech in Asia. Besides its Singapore office, it had opened branches in Malaysia and the Philippines.

Hard turn

And then, things changed. It didn’t happen overnight; the company wasn’t on the verge of bankruptcy; angry investors weren’t beating on the doors. But Noam could see there were problems with Zyllem’s path.

Managing its fleet and liaising with partners and clients started taking up too much of Zyllem’s time and resources.

“We were doing thousands of deliveries a day. We were positive on gross profit on the same-day business,” he says. Gross profit for its last-mile services was around US$0.70 to US$2.50 per delivery.

While gross profit does not take into account things like fixed costs, Noam is confident that the same-day delivery business could have become profitable eventually. But Zyllem would have to keep expanding and setting up offices outside Singapore if it wanted to generate enough revenue to cover the costs of maintaining a back office and development team.

Juggling fleet management, partners and clients relations, and technology research and development started taking a toll on Zyllem’s time and resources. And there was no clear way for the company to grow bigger, faster.

“The challenge I put to the team was, if tomorrow we had to go to 100 cities in China, would it mean we have to go rent 100 offices there?” Noam says. Something needed to change.

“The overall vision was to create this global Zyllem network for companies and consumers,” Noam explains. While it kept on developing tech for that purpose, the day-to-day of running a logistics business started dragging it deeper into that side of things. Not only that, but it colored the company in the eyes of others – for many, Zyllem was just a last-mile delivery startup, not a technology startup.

Scaling down to scale up

Coming from business software maker SAP, Noam’s background and calling is building tech. With that in mind, he made the decision to shift Zyllem to an all-software team.

So what’s Zyllem now? According to Noam, it’s “moving into pure technology” – a software-as-a-service company that enables last-mile logistics operators, rather than being an operator itself.

The core product team is building an online platform that’s meant to connect businesses to the right partners or to allow them to set up and run their own logistics network.