Chandigarh-based on-demand auto rickshaw aggregator, Jugnoo has restarted its hyperlocal delivery by launching a service called Fatafat. The service launched by the Paytm-backed startup has been restricted to delivering only vegetables and fruits through the company’s network of autorickshaws.
Samar Singla, Jugnoo’s founder said,
“The idea is to have a complete end-to-end integration. We will buy from the mandis in the morning and store in our warehouses. The products will then be delivered by autorickshaw drivers who are not taking a ride or are sitting idle,”
Fatafat is already clocking 100 deliveries a day and the model seems “unit-economics positive,” he added.
The Fatafat service was launched last year which continued for eight month. The service was then used to deliver orders for products such as grocery to buyers at their homes from stores within the city. About 2 lakh users were registered with Fatafat at the time and the company was receiving more than 1,000 orders a day across four cities. But then the delivery was withdrawn.
On this context Singla said,
“While Jugnoo’s network of autorickshaws was not that big earlier, there was a lot of competition from other grocery delivery apps which were giving huge discounts. Also, we realised that not everything in hyperlocal delivery is profitable.”
Products under the FMCG have very low margins and are available everywhere; making profit out of them is impossible,” he said. Singla said that the company realised that there is a huge market for fresh fruits and vegetables and there is a decent margin on them.
Launched in November 2014, Jugnoo was founded by Samar Singla and Chinmay Aggarwal. It is now present in 29 cities and claims to have a user base of 120 million. The Chandigarh-based firm raised $5 million in Series A funding from Snow Leopard Technology Ventures and Paytm in July last year. Other investors in the company include Rakesh Mathur, CEO of Flywheel and co-founder of Junglee (acquired by Amazon.in), actor Saumya Tandon, angel investor Vikas Taneja and Just Weil, an investor in Facebook and Yandex-who participated in earlier rounds.
In April, the startup had raised a total of $10 Million in its second round of Series B funding led by mobile wallet and mcommerce company Paytm. Paytm had invested $5 Million in Jugnoo while the other $5 Million had been introduced by its existing investor, Snow leopard, along with a new investor, a venture capital firm Rocketship.vc.