Earlier this month Dostavista, an international crowdsourced delivery service with Russian roots, announced the completion of a $15 million Series B funding round. The deal was led by Vostok New Ventures, a Swedish investment firm which is actively involved in the Russian VC market, with participation from existing investors Flashpoint and AddVenture.
Founded in 2012, Dostavista already raised equity funding several times, including $800,000 in 2016, $2.25 million in 2017and $2 million in September 2018, as reported by East-West Digital News.
The company now stands among the most successful Russian startups on the global scene. It claims to be already profitable with an annual GMV run rate “approaching $100 million.”
The company operates in 11 markets – Brazil, India, Indonesia, Korea, Malaysia, Mexico, the Philippines, Russia, Thailand, Turkey and Vietnam – where it sees “superior e-commerce market growth prospects.” It employs nearly 400 people and works with over one million registered couriers.
Complex algorithms, simple interface
Dostavista’s crowdsourced delivery system relies on complex algorithms to match huge numbers of sellers and customers while optimizing routes and costs. To users, however, the system looks super simple, says Dostavista: “Sellers just have to request a delivery on the Dostavista website or via the mobile app. A trusted courier will pick up and deliver the requested item in less than 90 minutes. Products are shipped in an extremely short time, via any route, transport, weight or size. Couriers can even collect cash payments.”
The crowdsourced delivery model is most relevant for same day delivery – “when you don’t know when and where to expect the orders, but need to deliver them fast,” Dostavista’s founder Mike Alexandrovski (Mikhail Alexandrovsky) explained to us.
“For planned next day deliveries, the traditional model is still arguably better,” he conceded.
Dostavista is one of the global leaders in its field, along with Lalamove and Gogovan. “In some countries we have strong local players, like Loggi in Brazil; in some others local competition is weak. In Asia, two big crowdsourced service operators, GoJek and Grab, provide a wider range of services, including ride-hailing,” notes Alexandrovski.
Alexandrovski says his company’s key competitive advantage lies in the technology: “We bet on algorithms. Delivery business is more complex than ride-hailing: it has multiple destinations, variable size, weight and transport types. We already have a powerful engine under the hood and plan to invest more in it.”
“Our main weakness in comparison to competitors was under-financing, but we are fixing that,” he said.
The latest $15 million capital injection will allow Dostavista to enhance further its product, making “new bold experiments” and developing marketing and sales “more aggressively.” The company also intends to strengthen its global team.
“The opportunity is enormous. The global parcel delivery market, both 3PL and in-house, is about $2 trillion. We are competing mostly with in-house couriers, which account for the better part of this market, so we don’t see limits to our growth in the coming 5-10 years.”
“We are already the market leader by number of countries of operation and we are preparing our technology, operations, and sales for exponential growth ahead,” claims Alexandrovski.
Dostavista now focuses exclusively on emerging markets, but does not rule out developments in the USA and Western Europe at a further stage.
How Dostavista serves e-commerce companies:
- Same-day delivery service by routes: When an e-commerce gives a set of deliveries in the morning or in the afternoon – in any number, – Dostavista’s system will define the optimal route. The cost of such delivery comes out “about the same or slightly more expensive than next-day or next 2-3 days deliveries,” says Alexandrovski
- On-demand delivery within 90 minutes: Online stores may offer premium delivery to their customers. Dostavista will handle the delivery provided that the store can track its inventory in real time and fulfil orders immediately from a location inside the city.
- Omni-channel e-commerce: A chain of stores can use Dostavista for immediate delivery between their stores or from any of the stores where the product is made available to the end customer.
- Return logistics: An e-commerce company can provide their customers with coupons for self-service return logistics via Dostavista.
- Courier rental: This popular service is used mostly by companies doing local delivery.
- E-commerce companies can even use Dostavista to deliver intercity orders in Russia: Dostavista’s couriers will handle the first mile; then long-distance partners will complete the delivery.
