Delhi-based start-up Smartbox, which provides online shoppers with a secure way to pick up their parcels from ATM-like terminals at a convenient location and time, is in talks to raise its first round of funding of $10 million from domestic and international investors.

With an installed base of 125 automated parcel-delivery terminals in metro stations, and residential and commercial complexes in Delhi-NCR, the start-up is now planning to establish its presence in top eight metros in 2016, with a targeted installed base of 800 terminals in Delhi, Mumbai and Bengaluru alone.

“We initiated talks to raise $10 million with investors last month, and expect to close the deal in September,” Amit Sawhney, founder-CEO, Smartbox.in, told BusinessLine .

Elaborating on the huge opportunity in the e-commerce parcel-delivery market, he said: “At present, an estimated 1.5-2 million parcels are being generated every day by e-commerce companies catering to 60-70 million online shoppers. This is expected to touch 20 million parcels a day, catering to 500 million online shoppers by 2025.”

Delivery boys for e-commerce firms successfully deliver 25-30 parcels a day in 30-35 attempts. “With our automated parcel terminals that have a storing capacity of 15-200 parcels, delivery boys can make 250-300 deliveries, increasing their productivity 10x times. All they have to do is, scan the barcode on each parcel one by one and drop it into the terminal, which automatically sends an OTP to the customer stating that their order has been delivered, to be picked up at their convenience,” Sawhney said.

This brings down the cost of re-delivering when customers are not present when the parcel is delivered the first time.

Competition

Smartbox will face competition from another start-up, QikPod, which aspires to be world’s largest parcel locker network. It was founded by serial entrepreneur Ravi Gururaj with $9 million funding from Accel Partners, Flipkart, Delhivery and Foxconn Mobile.

Smartbox has signed up with ShopClues and Oriflame to facilitate their deliveries, and is in the process of signing up with Voonik, Paytm, Amway, HealthKart, Zivame and Limeroad.

The terminals, which cost between ₹3-9 lakh, are custom manufactured for Smartbox in China. However, the company plans to manufacture the terminals in India this financial year, when they have garnered sufficient volumes to ensure economies of scale.

“Domestic manufacturing will help us save on high custom duties (28 per cent) and freight charges,” said Sawhney, who is optimistic about future growth. “China has built a network of 80,000 parcel lockers, from a zero base three years ago.Therefore, in India, where last-mile delivery infrastructure is very weak, the market for our products will only grow.”

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