It was while working on a project for a logistics firm a few years ago when an entrepreneurial opportunity struck Sanchit Jain and Abhishek Porwal.
"We found that 10 per cent of the cost of a product is getting that product to you, and realised that by using technology we could cut this cost down almost by half, significantly increasing the bottom line for our clients," Jain said in an interaction with Techcircle.in.
The duo set up DreamOrbit Softech Pvt Ltd in 2010, an Internet of Things (IoT) startup that focuses on the logistics and transportation industries. They bootstrapped the Bangalore-based company with Rs 15 lakh. Today, it has 275 employees. It claims to be profitable and its revenue has more than tripled over the past three years and is set to touch $4.5 million (about Rs 30 crore) in the year through March.
"We became profitable in the first year itself, and have been growing fast ever since," said Jain, the company's CEO. "Our industry-focused solutions have ensured higher profit margins versus generic software companies."
IoT refers to a network of devices that can communicate with each other, with or without human intervention. Logistics companies, for instance, can use IoT to track and manage the fleet remotely and provide need-based instructions as and when necessary.
Market research firm International Data Corporation predicts the worldwide Internet of Things market will grow to $1.7 trillion in 2020 from $655.8 billion in 2014. India is a fraction of the global market; the government's draft policy on IoT, released in April 2015, suggested a target of creating an IoT industry in India of $15 billion by 2020.
Most IoT startups in India are largely betting on consumer-focused opportunities, and some of these ventures have attracted VC funding. But startups such as DreamOrbit are focusing on the B2B segment. It's not the only one, though. IDG Ventures-backed ConnectM and Bangalore-based Locus, which raised funding last year from growX Ventures, are among the other IoT startups focusing on logistics.
IDC also said that, while wearable devices are the consumer face of IoT, the real opportunity lies in the enterprise and public sector markets.
Gartner research analyst Ganesh Ramamoorthy concurs. "Enterprise consumption of IoT has started to take off in India. VCs may have been putting in their money in B2C startups, but a huge opportunity lies for B2B startups."
What DreamOrbit does
DreamOrbit develops software for logistics services providers including for freight and supply chain management. Its target customers are trucking companies, warehouses, third-party logistics companies, and hyperlocal and last-mile delivery firms. The company offers customised end-to-end solutions to customers. Based on the client's requirements, it first creates the architecture of the solution, sources the hardware device such as SIM cards from vendors like Garmin, and then builds the software solution around the device.
Jain explains it with the help of an example. DreamOrbit's IoT-based technology helped a US pizza chain to deliver pizzas at the right temperature to consumers. How? The company inserted temperature sensors with attached SIM card in the boxes. These sensors send signals indicating the temperature of the pizzas to the store manager's computer. If the temperature drops below a threshold, the manager recalls the pizza and sends a fresh one.
In another case, DreamOrbit helped an e-commerce enterprise in the US to decide what inventory to keep in which warehouse and how to move this inventory around these warehouse at different times of the year so that the delivery to the consumer could be from the nearest location, thus reducing cost and shipping faster. Similarly, it helped a courier company automate its parcel delivery with the use of IoT-based automated locks, so that anyone from their workforce could pick and drop parcels without having to come back to the hub, making the delivery process faster.
Founders, growth plans
Jain, an IIT-Roorkee graduate, has previously worked with Tata Consultancy Services and Aditi Technologies. Porwal, an IIT-Delhi alumnus, earlier worked with Infosys and Aditi Technologies. Before founding DreamOrbit, the duo started and sold CircleSource Software, a healthcare-focused technology firm.
DreamOrbit has 70 enterprise clients across the world. The US makes up 90 per cent of its customer base while Scandinavia, New Zealand, Australia and India contribute the remaining. US firms GlobalTranz, 10-4 Systems Inc and Crane Worldwide Logistics are some of its clients.
In India, it is working on a project for a SAIF Partners-backed food-tech startup. The company has also built IoT-based keyless entry for Bangalore-based electric scooter rental services startup YourGreenRide, which is floated by the same founders. The company is now looking to tap into the fast-growing e-commerce sector. "E-commerce, for the most part, is logistics supported by good marketing," said Jain. "With the growth of the e-commerce industry and IoT, our solutions become increasingly significant."
DreamOrbit, which was till now offering customised solutions to its customers, is also looking to create software solutions and mass-sell them in targeted regions. For this, it aims to hire about 90 software engineers and 10 logistics experts over a period of 12 months. Besides, it wants to expand its customer base outside the US.
Jain said that, to meet its expansion targets, the company is looking to raise $5 million in external funding. "We will use 20-30 per cent of the fund to grow our IoT-based technology solutions and the rest for expanding to new geographies," he added.