Logistics tech gets more mileage: 7-week-old Opinio in India bags $1.3 million

The list of hyperlocal on-demand delivery startups in India grows longer all the time. Grofers, RoadRunnr, PepperTap, ZopNow, and now, Opinio, which today announced seed funding of US$1.3 million from Accel Partners, TracxnLabs, and angels. All are raising funds fast, and growing even faster.

PepperTap raised US$10 million in April, just two days after its southern rival ZopNow got an identical round of funding. Their elder brother Grofers raised US$35 million earlier in the same month. More recently, RoadRunnr raised US$11 million, and several other younger upstarts have also raided rounds.

Bigger fish are in the pool too: ride-hailing app Ola launched a grocery delivery service last week, and Amazon came out with KiranaNow earlier. (Mom-and-pop stores are called kirana shops in India.) Sounds like trouble for the newbies in a crowded space? Not quite, and here’s why.

No, one size doesn’t fit all

Mom-and-pop stores abound in India like nowhere else in the world. India has over 13 million retail outlets, the highest number for any country. India also has the highest number of retail outlets (11,903) per million inhabitants. Restrictions on FDI (foreign direct investment) in retail have kept the big global supermarket chains out of India, so the small retailers thrive in a relatively protected environment.

Culture has played a part in the proliferation of small independent shops too – there was always somebody at home in large multi-generational Indian households to run an errand to the shop around the corner. This personal connection with the local grocer has continued even though families are becoming nuclear in the metro cities and ecommerce is gaining ground.

The growth of mobile ecommerce and the proliferation of independent retailers in India are why investors see potential in a range of last mile logistics startups like Opinio. There’s no one-size-fits-all solution for getting small merchants scattered across a large country to use tech for efficient local delivery, so there’s likely space in the market for a number of logistics and delivery players to operate, with each developing its own set of clients.

That can be easier said than done. “Initially, there is a resistence to use technology because these guys [small independent retailers] find it difficult to comprehend at the first go,” Opinio co-founder and CEO Mayank Kumar tells Tech in Asia. “But if you assist them, enable them in the early days, they will stick to you.”

In fact, Kumar says, if you can get them to give it a try, chances are they’ll sign up:

Optimizing for the ‘ground pilots’