How Jugnoo scaled up to 90K transactions in 7 months and why it said no to Flipkart and Naspers investment

This year, hyperlocal-based delivery startups have shown immense potential and entrepreneurial ecosystem is witnessing an unprecedented windfall in this sector. While most of the startups focus on creating delivery network for hyperlocal needs, Chandigarh-based Jugnoo is leveraging its existing infrastructure to deliver hyperlocal needs at your doorstep.

Jugnoo is using auto-rickshaws to revolutionize hyperlocal commerce. Besides offering on demand auto-rickshaw, it enables hyperlocal deliveries like food, grocery, veggies among others via its own network of auto-rickshaws. Started in November last year, the company does 3,000 orders on a daily basis.

“Close to 60 per cent of our transactions comes from ride booking, 30 per cent from meals delivery and remaining is contributed by Fatafat (other hyperlocal deliveries),” says Samar Singla, CEO & Co-founder of Jugnoo.

The company charges merchants a commission and pays the auto drivers for delivery.

Jugnoo recently raised $5 million Series A round from Snow Leopard and Paytm. It raised series A after four months of angel round and when we asked the reasons for raising funds so early, Samar points out, “For a startup, the milestone before institutional funding is to get the model right. We are already in Series B category if you look at our numbers. And, series B will come soon. The speed at which some companies are copying our product makes the urgency even more justified.”

The company expanded to four cities in a span of just six months. “We’re moving ahead of our planned timelines, hence the growth trajectory is pretty steep. We don't want to slow down because in these businesses, momentum is very important,” adds Samar.

Before raising this round, it also pivoted from being an auto hailing app to being pure-play hyperlocal shopping assistant. Currently, Jugnoo is offering three services - on demand auto hailing platform, Jugnoo meals and Fatafat (hyperlocal deliveries).

Rather than expanding to other hyperlocal verticals, Jugnoo plans to go deep product wise and make sure the user

experience is smoother. “We have covered a lot of width very quickly in all our three services and can roll out in other cities very fast. We will have sharp focus on automating internal processes to scale fast without increasing headcount,” states Samar.While most of the funded startups usually operate and begin their operation in bigger cities, Jugnoo started its services in Chandigarh. “Chandigarh is my hometown, obviously I had to start from here. It gave me just the right platform and infrastructure to experiment and make as many mistakes before perfecting the game of on-demand services for more demanding cities,” says Samar.

Paytm’s motivation behind investment in Jugnoo

Paytm recently introduced hyperlocal listing in Bengaluru and will soon roll out in NCR and other cities.” It's a strategic investment and we see lot of synergies in what Jugnoo is doing. Logistics / hyperlocal deliveries is a good problem to solve and Jugnoo is trying to solve that using auto-rickshaws. Jugnoo is aggressively expanding its operations into a few more cities and we will leverage their network for fulfilling our hyperlocal marketplace orders,” adds Kiran Vasireddy, Senior Vice President, Paytm.

Why Jugnoo said no to investment from Flipkart & Naspers?

When Samar was looking for funds he was persuaded by Flipkart and Naspers but the deal didn’t go through with either of the companies. “Flipkart wanted too much control in the company and we said no to them while Naspers took a lot of time to confirm. Meanwhile, we foresaw better synergies with Paytm and Snow Leopard,” reveals Samar.

Just before raising its Series A, Tiger Global backed out of investing in Jugnoo. “It was heart breaking but their loss I guess,” says Samar.

Motivation which keeps Samar driving

“When I see an auto running past with a Jugnoo sticker, all I can think is the five million auto rickshaws in India who wait for business 60% of their time. Someone has to bring efficiency and economic prosperity to them,” he explains.

Road ahead

Jugnoo is also exploring foreign expansion since Samar believes his product is superior to a lot of global products. “We’re working on two deals to launch Jugnoo in South Africa and Philippines via joint ventures with prominent business houses there,” concludes Samar.

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