Logistics-as-a-service startup raises money to deliver across Asia

Terence Lee
5 May 2014
delivery man
delivery man

Logistics is a living nightmare for many companies going into ecommerce. They need to deal with warehousing, delivery, and fulfillment, which are areas of expertise most merchants aren’t equipped to handle.

Anchanto, a Singapore-based startup, wants to take away the sting of running an online retailer. It does this by offering companies a platform to outsource their logistics for a fee. Its model is similar to Fulfillment by Amazon.

It has raised a Series A round to expand throughout Asia, which follows two bridging rounds and a seed investment.

The most recent investment size wasn’t disclosed. But we know who’s involved: Innosight Ventures is leading the round, with Cub Capital, Scott Anthony, and Akshay Mehra contributing the rest.

Anchanto has bagged a number of paying customers since it launched in October 2012, including Robinsons, Wine Connection, and cosmetics brand Crème-Simon. It signed up three new clients in April 2014 alone.

The startup will use the funding to expand its warehouse capacity by eight times, with the ability to ship 4,000 orders a day in Singapore. It will also set up fulfillment operations in Kuala Lumpur, Jakarta, and Bangalore in the next six months.

Tech company through and through

While the startup’s main business is old-fashioned logistics, it’s still a technology company.

“Our 18-member strong technology team is focused on making things simple for our customers, automating every possible activity, resource tracking, allocation and identifying ways to optimize resources,” says Abhimanyu Kashikar, co-founder and CTO of Anchanto.

“We developed the entire order processing and warehouse management system from scratch to make sure the system is compact to its core and it does what’s needed for business.”

Co-founder and CEO Vaibhav Dabhade adds that Anchanto has a patent-pending auto-allocation algorithm for deliveries. It divides an area into smaller zones, and allocates varying amounts of credit according to the performance of the logistics person and the difficulty of delivering to a particular location.

That system can then figure out which delivery person is best suited to a particular area based on past performance. It could also better estimate delivery times so that customers won’t be disappointed.

Anchanto was originally working on Ship.li, an online shopfront featuring products from Anchanto’s clients. That idea was dropped, however, as demand for its main business, Fulfillment by Anchanto, far exceeded Ship.li.

That sharper focus might serve the startup well. It is entering an increasingly competitive space, with postal giant SingPost launching its ecommerce platform recently and fellow startup aCommerce competing for clients in Thailand and Southeast Asia.

Nonetheless, Dabhade says Anchanto sets itself apart by focusing solely on logistics and fulfillment, which is the team’s strength. SingPost and aCommerce, meanwhile, also provide ecommerce marketing services.

(See more: Here’s SingPost’s grand plan to rule ecommerce in Asia)

ACommerce founder Paul Srivorakul will be speaking at Tech in Asia’s Meetup in Bangkok on the state of ecommerce in Thailand. Do register for that if you’re in town.