BluWheelz to 'Green Up' logistics sector

With their EVs-as-a-service solution, the startup is playing it smart with costs and looking to electrify the entire segment through their leasing and subscription models.

By Kiran Murali calendar 23 Apr 2024 Views icon9140 Views Share - Share to Facebook Share to Twitter Share to LinkedIn Share to Whatsapp
BluWheelz to 'Green Up' logistics sector

With India’s EV revolution gaining momentum steadily, particularly in the commercial vehicle and two-wheeler segments, one can find a number of new entrants in the industry, hoping to leverage the transition. Among them is BluWheelz, a two-year-old startup that’s clearly ridden this wave with its EV-as-a-service solution for the logistics sector — within a year since starting operations in January 2023, the young company expanded its service to over 17 cities, with a fleet of 1,100 EVs and over 40 clients.

India’s consumption story is driving the need for distribution across segments like FMCG, grocery, automotive, infra and other home segments, both through e-commerce and brick and mortar distribution, involving first and last mile logistic services. Responsible distribution coupled with the cost advantages are clearly the triggers for newer players like BluWheelz to grab the opportunity.

IIT graduate Sanjiv Gupta founded the New Delhi-based startup in 2022, after a successful stint of over four decades at major consumer companies, including Unilever. He also played a key role in building the Kinley brand at Coca-Cola and is credited with India’s first global air cargo carrier, SpiceXpress. 

Gupta joined hands with logistic industry veteran Chanpreet Singh Sethi and ex Banker Jaspreet Dhingra, an experienced Chartered Accountant, who has worked with global banks like HSBC and American Express.

“We felt EVs were going to cause a major disruption in the logistics space and change the whole ecosystem,” Gupta, who is also the Chairman of the company, said on their inception. “Since we understand logistics, we decided to introduce EVs as a mobility service.”

Finding a market gap

The booming e-commerce business and demand for faster delivery is transforming India’s logistics sector. In this context, most companies are looking at EVs as a sustainable mode of transportation in their first- and last-mile operations, due to factors such as economic benefits and environmental concerns.

BluWheelz offers fleet-as-a-service solutions with EVs for the logistics operations across industry segments ranging from FMCG, Pharma, Grocery, Infra, Homecare, news print, food delivery etc, offering customised solutions for customers as per their requirements. They work on a monthly subscription model, and clients include both large international companies and small and medium enterprises. Amazon, Flipkart, Delhivery, Zomato, Potter, Mother Dairy, Asian Paints, Cipla and Britannia are among BluWheelz’s major clients.

Highlighting the great opportunity that BluWheelz sees in electrifying the logistics operations of distributors of India’s consumer firms, the founder-chairman said this model creates entrepreneurship opportunities and helps more fleets to switch to EVs.

“When we got into this market, we found that customers were looking for solutions to address their sustainable mobility concerns. But clients were not in touch with original equipment manufacturers, or fintech companies, or even the charging infra guys,” he explained.

Going the leasing way

The company’s operations are business-to-business with an asset-light model as they don’t buy the vehicles; instead, they lease them. Lease and driver costs and parking charges are their major operating costs.

For this, BluWheelz has tied up with several major vehicle leasing and charging infrastructure providers such as Sun Mobility, Log9 and Charge Zone, to meet their customer requirements. Their fleets include vehicles Alti Green, Tata Motors, Hero Electric Omega Seiki Mobility and EKA Mobility.

Under their partnership with Sun Mobility, BluWheelz eyes over 15,000 electric two-wheelers and 1,000 electric three-wheelers in all metropolitan cities. While announcing their tie-up with Log9, the company said their collaboration plans to deploy 5,000 two-wheelers, 1,000 three-wheelers and 500 four-wheelers.

Gupta’s strong team of executives includes CEO Chanpreet Singh Sethi and others from various logistics and consumer companies. They also recently hired Abhishek Prabudha as the head of its operations and IT. He previously worked for companies such as Delhivery, FedEx and DTDC.

In addition to this the company has put in place a Board of Advisors, comprising of very seasoned professionals from FMCG, logistics and automotive sector.

“From our previous experiences, we understand first-, mid- and last-mile mobility services very well. We also knew several major logistics players because of our background,” Gupta said, explaining how well his team can connect with their clients and understand the nuances of the business.

Leveraging client diversity

The startup gets around 20% of its business from e-commerce and food delivery firms. The only way to de-risk the business, the management believes, and make money from their service is by onboarding a diverse set of clients across different categories and cross utilising their fleet.

“Our services are used across various business sectors, ensuring robust and sustainable revenue through cross-utilisation and a broad appeal. We are not dependent on e-commerce alone; instead, we have customers in FMCG, pharma, logistics, paints, etc, which are more sustainable and profitable businesses,” Sethi pointed out.

Major e-commerce and logistics players like Amazon India, Flipkart, Zomato and Swiggy are actively electrifying their fleets. Amazon, for instance, has set a target of 10,000 EVs in its India fleet by 2025, while several other e-commerce and logistic majors are planning to shift their entire delivery fleet to EVs in the next five to 10 years.

Initially, BluWheelz started operations with two-wheelers, gradually including three-wheelers and light commercial vehicles. They currently have around 40 billable customers across the country and various business categories. By June, the company aims to bring the figure to 60.

Furthermore, BluWheelz has adopted a franchise model to expand its operations to other cities across the country. The management believes that their “unique low-cost and high-impact franchisee model” significantly contributes to the company’s efficiency and speed of expansion. Here, Gupta noted that they achieved in a year and a half what competitors in this segment did in four years, and boasting about their capital efficiency, he highlighted that they did in USD 1.25 what others did in USD 4.

Next moves

The company is rolling out an ‘Own Your Bike’ scheme with Battery Smart and other battery-swapping players, where the individual, in addition to earning money, can also own the vehicle. Gupta is certain that this model will create entrepreneurship opportunities and help more fleets move to EVs.

The startup will also soon foray into the trucks division for first-mile services and support retrofitting of internal combustion engine vehicles with motors and controllers. For the latter, BluWheelz has a tie-up with Kalyani Powertrain for heavy commercial vehicles and is working with another major OEM for light commercial vehicles.

The current ambitious target is to make BluWheelz India’s largest EV logistics company over the next two to three years. By the end of the current financial year, the company, which recently achieved a milestone of USD 1 million in revenue, is eying a fleet of 3,000 EVs. They are also planning to raise USD 10 million in funding through debt and equity this year.

Another way BluWheelz is looking to capitalise on future growth is the environmental, social and governance (ESG)targets that companies set for themselves. Gupta said: “Every CEO has ESG goals. With our kind of service, companies will realise that operating cost could be just one-fourth of what it is now. That’s when the money comes in.”

Expanding to Tier II and Tier III cities, apart from Tier I cities is also part of their business strategy. BluWheelz sees huge scope for expansion in Tier II cities, which also bodes well in terms of efficiency as driver costs and parking charges are lower.

 

This feature was first published in Autocar Professional's April 15, 2024 issue.

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