Where other transportation aggregation services struggled to aggregate three wheelers, Jugnoo made it possible. Where many failed to gain traction in tier-II and tier-III cities, Jugnoo has given a new perspective towards user acquisition. This is an exclusive interview with the founder of auto aggregation app Jugnoo, Samar Singla.
An avid traveler and a photographer who likes to document the mundane and the everyday world. “I am not really fond of the exotic superficialities that the world has to offer but rather love looking for interesting in between the moments of ordinary life,” quotes Samar.
Tell us the story behind Jugnoo. What is your vision?
The auto-rickshaw segment is one of the important public transport system in India because they are inexpensive and easy to move through crowded streets. The turnover of the auto rickshaw segment is close to $26 billion annually but still it is an unorganized and underutilized market due to the inefficiencies prevalent in the conventional hailing procedure. Jugnoo was started with a vision to overcome these roadblocks by bringing structure into this space, aggregating auto-rickshaws via technology, thereby, enabling optimum utilization of resources. The objective at Jugnoo is to provide a convenient auto-rickshaw ride to all the customers across India via single tap that too at affordable rates. Hence, Jugnoo started operations in Chandigarh in November 2014 and is currently rendering its services in more than 30 cities of India.
What struggles did you face in building a startup and scaling it up in a Tier-II city?
Most of the entrepreneurs face similar challenges at the outset ,however, in case of Jugnoo it was a bit different as we were exploring a very different business venture and convincing the auto rickshaw drivers was a big task. Most of our time was invested in educating and training the auto rickshaw drivers about the concept of creating a standard fare model that was relatively less than the base fare and how it could be a viable revenue model for them.
What is the scope of hyperlocal startups – food, grocery, home services etc. in Tier-II & Tier-III cities?
The scope for hyperlocal startups is very promising in Tier-II & Tier-III cities as it has been an untapped market till now. While most of the companies have been focussing only on Tier-I cities as far as this domain is concerned, the potential in Tier-II & Tier-III cities still remains to be explored.
Jugnoo has restarted hyperlocal delivery by launching a service called Fatafat under which the company will delivering vegetables and fruits at the door step using the company’s’ network of auto-rickshaw. The service was first introduced in March last year and was continued for eight months. The idea is to have a complete end-to-end integration. Jugnoo will buy the product from Mandi and store it at their warehouse. The products will then be delivered by auto-rickshaw drivers who are not taking ride or are sitting idle. The service is currently available in Chandigarh and will be soon be launched in other locations as well.
Does India need so many on-demand startups?
With the advent of mobile internet and non standardized and fragmented services market in India on demand products are an obvious problem to solve for a lot of startups. However, the fact remains that delivering goods and services is, at its core, a low-margin logistics business. Only companies who are extremely frugal in their approach to build the demand and supply platform will survive.
Your company was working in a similar segment and has again started e-grocery services. Why did it not work out for you? & What different do you plan to do this time?
The response during the first phase was quite positive, the demand for e-grocery was more than the supply network we had then and had to suspend the services for interim period to rework on increasing the fleet size and logistics. We have successfully achieved the number of driver partners that we were looking for and hence decided to resume ‘Fatafat’ service in Chandigarh. Our objective is to reduce the down-time of the drivers and keep them engaged by deploying them for grocery delivery services.
What marketing strategies did you use to scale up?
We are investing very cautiously in our marketing activities as operating in tier-II and tier-III cities is a different ball game altogether. We focus on a lot of on-ground activities to create buzz about the brand and the services we offer. We have been growing largely through the word of mouth which is the most reliable and tangible way to know that our offering is sought after. We also encourage our driver partners to reach out to fellow drivers and new customers who ride with them. Beside this we also engage in user referral campaigns and social media promotions for scaling up the demand.
Who would you say is your biggest competitor?
Ours is the only startup in India to focus exclusively on auto-rickshaw space. Hence, our market is different and much bigger than the other players in the industry. We are thought leaders in our domain.
Also, we are an aggregator in true sense. Unlike our competitors, who are building supply and then aggregating it, we are leveraging the existing supply.
Cab companies are dropping their rates, ridesharing/carpooling firms are coming up, why do you think people would prefer on demand autos over an ac cab, especially in summers?
Our target audience is different from the individuals who prefer to use cab services and its only in metro cities where you see on demand cab aggregators. The scenario is different when it comes to tier-II and tier-III cities. The public transport system is not as developed and auto-rickshaws are primary mode of transport besides the public bus services. Hence our strategy is to entrench our services in tier-II and tier-III before we focus on tier-I cities.
What is your opinion about the bike taxis? Is there space for more transportation startups in India?
Bike taxis indeed is a new concept and something that has been talked about a lot off late, however we have to wait and watch the viability of the service it provides. There is definitely space for more transportation startups in India as it’s a huge market with enormous potential.
What are your expansion plans for Jugnoo?
We are currently rendering our services in 33 cities of India and plan to to expand our reach to 100 more cities by the end of next year. We have already rolled out our services in villages and intend to reach the remotest corners of the country by the end of this year.
Apart from this, we are also working to have an international presence over the coming months.
We are expanding our services gradually across tier-III and tier-III cities and are operating in more than 30 cities. We have rolled out our services in villages and will be launching Jugnoo’s on demand service in 3-4 cities on monthly basis.
Do you plan to raise more investment? Are you profitable?
Fundraising is always an ongoing process at Jugnoo. We have recently closed our Series B funding at $10 million. Although there is no immediate need of funds right now, but the preparations for next round of funding have already started. We hope to close it within 3-4 months from now.
We are currently in the growing phase, and our focus is on scalability and sustainability.
With that said, do you think Jugnoo can become a global product?
We have plans to expand at both national and international level. Our vision is to enable optimum utilization of resources globally wherever there is a gap that can be filled by integration of technology. Our business is not limited only to auto-rickshaw aggregation, but to creating a logistics network for the mass market within and outside of India.