Tech-based logistics start-up DOT looking for $25mn fund raising

Gurugram-based green mobility start-up DOT, which runs a fleet of electric two and three-wheelers for cargo shipments, is looking to raise about $25 million (Rs 175 crore) within two years.

About $10 million (Rs 70 crore) would be raised later this year while $15 million (Rs 105 crore) would be raised in 2021, a top company official said to Moneycontrol.

These funds would be used by the company, which is valued at $75-80 million, to expand operations not just in India but in North America, Asia and the Far East as well.

Vineet Mehra, managing director, DOT said, “We need funds to develop the larger ecosystem and we don’t have the capability yet to do that. The fund raising plan should take our plan to be one of the largest electric fleet owners in all the geographies we are present.”

DOT’s current strength is of 1200 vehicles which are mostly run on batteries. About 20 percent of that fleet also runs on a non-electric model. Most of the vehicles are leased out by DOT on a long-term contractual basis to corporates for their logistics needs.

“We are operationally profitable and we are looking for another $20-25 million to reach our target. We are also planning to launch in South East Asian countries like Thailand, Vietnam, Singapore and Malaysia, and also launching a ride-sharing service in Canada in the second half of 2019. We will be carrying out the expansion in the Far East from 2020 onwards,” said Mehra.

“We will bring in more external people for their knowledge and for wider investment spectrum so that we don’t require much cash from our own operation and then we would go for a fund raise in the second half this year for about $10 million. We have had some off-line talks for the $10 million raising and we have had lot of interest”, added Mehra.

Walmart, Aramex, Amazon, Grofers, Blue Dart, DHL, Lenskart, Swiggy, Faasos, Nature’s Basket, McDonald’s, are DOT’s clients. DOT has a target of putting 10,000 vehicles on the road in the next five years.

It has operations in Delhi-NCR, Mumbai, Chennai, Pune, Lucknow, Chandigarh and Bengaluru to name a few. It recently added Raipur, Jhansi, Meerut, Haridwar and Phagwara.

“Right now we are in 27 cities and we would like to cover at least 100 cities in 3-4 years”, said Mehra.

DOT’s current fleet is either owned directly by the company or is leased. All of its vehicles are manufactured in India. The electric two-wheelers are 50 percent localized while the three-wheelers are 95 percent localized. This is the is the level of parts that are sourced within the country.

Though there are a few companies that have an all-electric fleet used for commercial operations, DOT is the first company to use them for cargo movement.

DOT’s two and three-wheelers are manufactured through a exclusive contractual agreement it has entered with a third party. These vehicles are especially tailor-made for shipping cargo.

“We diversified into a pure play last mile delivery company and we set up a large research facility in Singapore. For this we started to work with our sister company to work on creating vehicles specific for cargo needs for both two and three wheelers”, added Mehra.

The company claims to be doing 7-9 million orders a year and is poised to achieve 103-110 million orders by FY20 using electric vehicles.