ElasticRun, a Pune-based company, is successfully meeting the growing demand for express commerce in India through its last-mile delivery solutions. Initially, the company showed some hesitation in working with a visually impaired individual who approached them to join their network. However, this person convinced ElasticRun by demonstrating strong local connections.
Network Expansion and Technology Accessibility
Today, ElasticRun claims to manage one of the best order fulfillment networks for the company. This case exemplifies how ElasticRun has expanded its last-mile delivery scope beyond major cities into the country's hinterlands, while also creating a technology platform accessible to anyone. The company's partner network comprises 50,000 people, allowing them to use services entirely via smartphone.
The company was founded in 2016 by Sandeep Deshmukh, Saurabh Nigam, and Shitesh Bansal. They managed to synchronize three key elements of any logistics system—real estate, transportation, and the vehicles themselves—on a single technological platform. This enabled the company to scale to over 1,000 fulfillment centers distributed across the country.
Operational Scale and Business Model
The startup's network of warehouses and fulfillment centers has sorting capabilities and processes over five million shipments daily. The company operates in 22 states and covers more than 600 cities and towns. Sandeep Deshmukh, founder and CEO of ElasticRun, noted in an interview with YourStory: 'Our idea was to use technology to create a low-cost logistics model and provide access to all these brands in the most remote parts of the country.'
The founders' backgrounds in technology and logistics also helped, as they previously worked at companies such as Amazon, Infosys, and DHL. As Deshmukh emphasized, 'our thought process at the time of founding was to combine all elements on a technological platform to create a logistics network with low capital expenditure but high scalability that anyone can use.'
Funding and Clients
The unicorn startup has attracted $462 million in investments from investors such as SoftBank, Prosus, and Avataar Ventures. ElasticRun's clientele includes a wide range of companies, including Amazon, Flipkart, Myntra, Ikea, Supertails, Croma, and Mokobara.
Over the years, ElasticRun has adapted to various phases of logistics: initially serving e-commerce companies, and later, Fast-Moving Consumer Goods (FMCG) corporations. Currently, its business is driven by the express commerce sector. In this process, the ElasticRun network has moved beyond metropolitan areas and penetrated semi-urban and rural regions.
Innovation and Operational Efficiency
According to Deshmukh, the company developed a solution that ensures connectivity to any part of the country at a uniform cost, regardless of demand density. The company changed the rules of logistics by abandoning the traditional 'hub-and-spoke' model, where goods are consolidated in a central node and moved to regional points. Instead, it created a network that delivers faster.
This flexibility helped it adapt to the rapid delivery model. A co-founder notes: 'Anyone who wants to launch express commerce can utilize our existing logistics network by placing their goods with us and then delivering them to their customers in a very short time.'
Advantages Outside Megacities
Deshmukh believes that ElasticRun's strength lies in its last-mile delivery network, which can handle large volumes at a lower cost. This has contributed to the startup's expansion into Tier II locations and beyond, including rural areas. Here, the penetration of mobile phones with internet access became a decisive factor for ElasticRun, as all last-mile delivery could be performed through a device. Furthermore, it transformed many residents of these areas into entrepreneurs, as delivery meant earning supplementary income. Today, many people earn a regular income and have become part of the formal economy.
Technological Foundation and Future
The company asserts that its technology stack has helped adapt to changes in India's retail landscape. The startup operates on a SaaS model, making it accessible to every member of its network. Deshmukh explains that the core of the technological platform is a machine learning mechanism that constantly learns from past data, improving forecasts. Simultaneously, the company is implementing Artificial Intelligence (AI) technologies, which enhances operational efficiency and accuracy. Although Deshmukh believes that physical AI will be the next major breakthrough in the logistics industry.
ElasticRun plans to collaborate with e-commerce firms, including express commerce, FMCG, and Direct-to-Consumer (D2C) enterprises. Key growth drivers are also offline businesses looking to strengthen their online presence. According to Deshmukh, 'we see great interest from these players this year as they try to find ways to reach their customers faster.'
At the same time, ElasticRun is clearly focused on profitability per unit economics. Deshmukh notes that the demand for logistics is growing rapidly, but supply is not keeping up. As part of future plans, ElasticRun intends to accelerate penetration into semi-urban and rural areas. Deshmukh stated: 'Reducing lead times is a big business opportunity.' Over the next 18 months, ElasticRun aims to transform into a high-speed order fulfillment mechanism while maintaining quality standards. 'Currently, our hands are full servicing the fast movement across the country,' added Deshmukh.