Karan Dhillon, founder and CEO of DFC Logistics

1. Kindly brief us about the company and its services.

DFC Logistics is primarily a tech-enabled B2B and B2C logistics service provider. We started our operations in 2014. Due to size and capital constraints, India has over 65 million MSMEs; these SMEs can only process limited orders. DFC provides a cost-efficient, fast and reliable logistics solution for these smaller orders, ranging from a single parcel to a full truck.

DFC stands for Delivery For Change, and we aspire to help improve the lives we touch. From helping small companies expand their reach to the smallest villages of India to improving the lives of the end consumers who get access to better products due to our services, we hope to be the logistics company India relies on to deliver on the promise of a better future. We have three business verticals: parcel service, contract logistics, and warehousing.

2. With what mission and objectives was the company set up? What are the challenges you faced while starting the company? In short, tell us about your journey since the inception of the company?

After graduating from college, I joined my family’s legacy logistics business, which was primarily a fleet management business. The company would provide vehicles to factories for their full truck transportation. Speaking to factory managers and supply chain managers at these companies, I realized that they were having difficulty providing logistics for their smaller buyers and distributors. After doing a thorough market survey, we found that these SMEs are underserved and lack dependable options. Moreover, these SMEs did not have a one-stop solution for their short-term storage requirements and last-mile delivery. This is where we got the idea to start DFC Logistics.

In 2014, venture capital in India was a relatively new concept. So we have always looked to maintain positive unit economics when opening branches and have emphasized profitability from day one. Every branch we opened was done so after careful market research and route optimization. The biggest problem we have faced as a start-up without external capital is attracting top talent. Moreover, the balancing act of maintaining your company’s growth rate with profitability can really test an entrepreneur, especially in an inflationary market with ever- increasing prices. One of the most important things that startup founders do not discuss is the mistakes that they have made or will make as they create their firm. Mistakes are inevitable and this is where I feel VCs add value to a company with their guidance. Netflix, Zomato, and Delhivery are great examples of how the best start-ups have pivoted not once but numerous times.

3. What is your biggest USP that differentiates the company from competitors?

DFC provides one of the fastest services to tier 2 cities. We are a full-stack logistics service provider whereby we do the first-mile pick-up, mid-mile, and last-mile delivery for our clients. We are tech-enabled, so the user experience for our clients is fairly seamless. Clients can request an online pick-up, track their deliveries, get email notifications and have online payment options. On the backend, we have proprietary software that helps us optimize our loading with the right product mix to maximize revenue per kg loaded. In addition to express parcel service to Tier 2 and Tier 3 cities, DFC Logistics also provides SMEs with short-term and long-term warehousing facilities ranging from 1 month to 11 months.

4. What are the initial investments and funding?

We are a bootstrapped company that has raised around INR 10 Cr from banks to expand our operations.

5. How many cities does DFC Logistics have a presence in? With how many partners and clients is the startup working with?

Currently, DFC Logistics is present in over 70 cities, and we intend to increase to 300 cities within the next three years. We have 60,000 SMEs on our platform and have delivered over 10.5 million consignments to date. Rupa & Co, Lux, Aqualite, Khadims, Berger Paints, and Bata India Ltd are some of the companies we work with.

6. Any recent developments and expansions, or partnerships happened in the company?

Our current operations are primarily in East and North India, but we have ambitions to go pan India in the coming five years. There are currently 3 sorting centers, 35 booking offices, and 32 branches. Our goal for this year is to open 30 new branches in West Bengal and Uttar Pradesh.

7. What are your growth plans for the next 12 months?

Despite the COVID disruption, we have been growing at an average of over 200% a year. This financial year, we have set ourselves a top-line target of INR 40 Cr. We intend to achieve this target by expanding our footprint in Uttar Pradesh and North Bengal. Additionally, we are planning to purchase EVs for our first- and last-mile mobility solutions. This would benefit us, particularly in East India, wherein we will hold the first-mover advantage when the government decides to ban ICE vehicles from entering city borders (as Delhi has done this year). We also hope to be one of the stakeholders that helps with EV adoption in East India.