Revolutionizing Connectivity: Tusker

The investment thesis for our investment in Tusker, a start-up that is set to revolutionize regional connectivity in South India.


Leading global brands face a logistical challenge as they endeavor to expand their customer base to Tier III and Tier IV cities, heavily relying on intra-region logistics that make up ~18% of the country’s logistics GDP1 and cater to approximately 65% of its non-urban residents2

Common obstacles:

  • Weak distribution network: The current network from distributors to retailers is often unreliable, with infrequent services to transfer goods from warehouses to channel partners.
  • Unreliable service: Delayed delivery and damaged goods erode trust in logistics providers, leading to a more restricted brand reach.
  • High costs: The mid-mile logistics market is underserved by major players and local distributors alike, leading to a limited range of options and higher costs that eat into the distributors’ and retailers’ margins.

Most FMCG brands, for example, face significant limitations in fully penetrating into Tier III and Tier IV markets since these regions are typically devoid of proper infrastructure and services. As a result:

Major logistics players (i.e., large fleet owners):

  • Continue to focus on Tier I and Tier II cities due to larger volumes and better infrastructure leading to greater profitability without being asset-heavy.
  • Those seeking to build asset-heavy models are opting only for long-haul routes as a preferred path to financial gain, leveraging economies of scale, reduced competition, and fixed contracts.

Local distributors on the other hand:

  • Are forced to stick to their respective clusters due to the high cost of expanding logistics components for improved service reliability.
  • These distributors remain focused on acquiring customers via traditional avenues and fulfilling last-mile delivery.
  • As a result, a significant gap persists between first-mile and last-mile fulfillment, with the existing logistics flows remaining unorganized, infrequent, expensive, and unreliable.

India’s logistics industry urgently needs innovative solutions to overcome the shortage of mid-mile delivery infrastructure and improve operational efficiency in the fast-evolving business environment.

Tusker’s Playbook

Tusker’s B2B logistics platform seamlessly connects Bharat’s distributors (of consumer goods) to retailers for on-demand short-haul logistics in Tier III and IV markets of Karnataka, Maharashtra, and Goa.

Founders’ solution to take charge and address problems head-on

  1. Spot booking: Flexible spot booking allows for instant orders based on demand and requires no prior commitments.
  2. Variable truckload: Distributors only pay for what they need, not a full truckload, reducing overall shipping costs.
  3. Incentives for drivers: Drivers can optimize respective truck loads by supporting mid-mile logistics for extra pay.
  4. Digital connectivity: Through its mobile application, retailers can seamlessly track orders increasing the reliability of service.

Tusker‘s offerings are a win-win situation:

  • Distributors are now offered reliable delivery with no minimum size and with fair pricing based on volumetric mass – not a full truckload.
  • Transporters (i.e., drivers) are now offered flexibility and extra income, accompanied by improved revenue visibility.
  • Retailers receive doorstep delivery along with value-added services such as round-the-clock customer support, heavy load helpers, tracking, and insurance.
  • Depot Partners are able to optimize space utilization and expand their customer network.

Why Modulor Invested:

Why the industry?

The total addressable market for on-demand inventory fulfillment is currently at ~$7 billion3 backed by strong e-commerce growth, rising incomes, and prominent brands capitalizing on new customers beyond traditional boundaries.

Further, the advent of GST has made cost optimization a priority for warehousing over tax optimization.

Why Tusker?

Since its inception, Tusker has generated total revenue of $2.5 million and has witnessed steady revenue growth of ~12% month-on-month.

Additionally, Tusker’s network now boasts 3 hubs, and 50 logistics partners, and has served 30+ brands to date.

Thus far, the company has successfully shipped a volumetric mass of 95,300 metric tonnes maintaining a low incidence rate of consignments damaged at 0.05%, consignments lost at 0.02% and consignments misrouted at 0.04%.

The round, which was led by Modulor Capital, is also backed by other powerhouses such as Supply Chain Labs, Vistra ITCL (India) Limited, PointOne Capital Trust and Blume founders, firmly establishing Tusker as a formidable venture.

Why the founders?

Amit and Sharath, the two co-founders, have a stellar track record as serial entrepreneurs in supply-chain logistics.

They were instrumental in building Logistimo, a leading logistics company in the public goods supply chain across India, Africa, and Asia.

At the time of their departure, Logistimo was already managing a staggering 40 million annual transactions.

Tusker is a part of the Modulor Novateur portfolio.


3. Edelweiss Investor Research (2020, May) p.4