lalamove gets a fresh $10M to expand its on-demand delivery service
A Q&A with lalamove co-founder and director, city expansion Gary Hui. The Hong Kong-based startup, which offers an on-demand delivery and moving platform in various markets throughout Asia, announced last week that the team has secured $10 million in Series A funding. Investors include Crystal Stream Capital, Geek Founders, MindWorks Ventures, Sirius Venture Capital and Aria Group. It was founded in 2013.
SUB: Please describe lalamove and your primary innovation.
Hui: lalamove is a goods transportation platform, and we aim to transform the entire last mile delivery industry globally. Through our mobile platform, we match users directly with the best drivers nearby, empowering users to move anything, anywhere, anytime, with just a few taps on their smartphone. At the same time, we help qualified vehicle owners and drivers increase their income by turning idle capacity into extra revenue.
SUB: Who are your target markets and users?
Hui: Our users range from individual users sending small packages or moving houses, to businesses looking for reliable and fast local courier and delivery solutions.
SUB: Who do you consider to be your competition, and what differentiates lalamove from the competition?
Hui: In Hong Kong we were disrupting a market where there was a lot of traditional call centers for van services. By building a large, quality fleet through mobile technology, and matching users and drivers based on data like locality, driver rating, and user requirements, we were able to greatly improve the efficiency and the accuracy of match compared to other players in the market.
As we enter into other cities, in most markets we are really rolling out a transportation model that is entirely new to the local users. We are also seeing a lot of startups trying to go into the delivery sector, and I think it is great in terms of popularizing this instant delivery model to these markets. One thing that we focus on is to really localize our product and services to cater to the needs of different markets, and move really fast at the same time. That is exactly how we became the market leader in cities like Singapore in such a short period of time.
SUB: You just announced that you’ve raised $10 million in Series A funding. Why was this a particularly good time to raise more funding?
Hui: In the past few months we have validated the business model with the growth outside of Hong Kong, and now we are looking to expand our business across Asia. Speed is one of the critical factors in our expansion, and the money will help accelerate the development.
SUB: How do you plan to use the funds?
Hui: This investment will help with the growth of our business in the six cities we currently operate in—Hong Kong, Singapore, Bangkok, Shenzhen, Guangzhou, Taipei, and also support our expansion in other parts of Asia. We are also actively hiring the best talents to provide an always better service through technology.
SUB: What was the inspiration behind the idea for lalamove? Was there an ‘aha’ moment, or was the idea more gradual in developing?
Hui: It came from a discussion our CEO and founder Shing had with a friend—who is now one of our investors. Shing’s friend wanted to sack his chauffeur and find a new driver. They were looking for different solutions and ended up studying the business model of Uber and other O2O (online-to-offline) companies. The passenger market was obviously getting crowded, so Shing decided to apply this on to another vertical—delivery vans.
SUB: What were the first steps you took in establishing the company?
Hui: We went to talk with all drivers, call centers, delivery companies and frequent van users we could find. At that time there were already a number of similar platforms trying to bring the traditional call center model ‘online.’ However, none of them was really making use of the data captured on the platform to improve matching, and driver quality remained a huge concern for customers. It was an opportunity for us, and we rolled out the product seven weeks after the first line of code was written.
SUB: How did you come up with the name? What is the story or meaning behind it?
Hui: When we first started with the name ‘EasyVan’ we were only looking at making the van-hiring process easy and efficient for users in Hong Kong. But as we continue to expand our business to other cities and offer more vehicle types, ‘van’ doesn’t really represent what we’re doing anymore. We want to make logistics accessible and enjoyable to everyone, and the name ‘lalamove’ just feels fitting to this idea, being all encompassing, bright, and airy.
SUB: What have the most significant challenges been so far to building the company?
Hui: One thing that differentiates goods transportation from the passenger transportation market is the complexity of each transaction. Instead of just moving a person from point A to point B, on our platform we have to take into account different types of items, distribution model, vehicle specifications, and driver competence, and these factors vary a lot from city-to-city. Because of this we spend a lot of efforts in understanding local market needs and making sure we are offering something valuable in each local market, while not compromising the scalability of our system as a whole.
SUB: How do you generate revenue or plan to generate revenue?
Hui: There have been plenty of opportunities to monetize, but we choose to optimize for growth. At this stage we are really just focusing on providing exceptional service and creating value to both customers and drivers on our platform.
SUB: What are your goals for lalamove over the next year or so?
Hui: We are looking to increase the breadth and depth of our service offerings to the users in each market, and bring our platform to tens of cities by the end of this year. What we are doing right now is just the tip of the iceberg in the goods transportation market, and we will look to capture some of the new opportunities we see as we grow.