Loadshare Networks Private Limited

South Asia Communications and IT Services

Loadshare is an Indian logistics company that uses technology to bring together small and medium logistics companies to create a pan-Indian network reaching local suppliers and rural customers. By bringing together these smaller companies, Loadshare enables them to have better market access, which in turn boosts their growth and creates jobs.

Our investment

We invested in the business in 2020 to support this growth and to create more jobs. Levels of unemployment are high in the markets where Loadshare operates, and we know that both the staff employed by the ‘last mile’ delivery partners and the truck drivers are typically low-income workers with limited prior access to formal employment. Our expectation is that these jobs will have a significant positive impact on earnings.

Impact

Provide income generating opportunities (SDG 8.5), primarily through indirect employment creation.

How?

Direct: By aggregating logistics services providers (LSPs or ‘delivery partners’) on its online platform, Loadshare enables better market access for these small businesses and additional demand fuelling growth in their revenue and employment creation.

Stakeholder Geography Characteristics
Suppliers, their employees

Financial year 2020 baseline: 800 active branches across 18 Indian states, primarily in the north east of the country. Approximately 60 per cent of indirect employment generated in category ‘A’ states. Expected pan-Indian expansion focusing on category ‘A’ and ‘B’ states in and excluding north east India. Potential expansion into Nepal and Bangladesh.

  • B2C segment (last mile e-commerce): Last mile delivery partners are typically micro-entrepreneurs with revenue less than $4,000 per month that are new to the sector or do not have the technology capacity and access to cater to large shippers. The drivers they employ are typically low-income workers with limited prior access to formal employment. Only 0.5 per cent are women.
  • B2B segment (trucking): Truck delivery partners typically have revenue less than $10,000 per month, owning at least two trucks, responsible for managing daily trucks operations, and hiring truck drivers and assistants on their payroll. Truck drivers and assistants are typically low-income workers with limited prior access to formal employment.
Scale Depth/Duration
  • Last mile delivery partners: Financial year 2020 baseline: approximately 5,000 staff employed by approximately 130 last mile delivery partners. Financial year 2021 projections: approximately 10,000 staff employed by existing and new delivery partners.
  • Truck delivery partners: Financial year 2020 baseline: approximately 1,000 truck drivers and assistants employed by 70 truck delivery partners. Financial year 2021 projections: approximately 2,500 staff employed.
  • Loadshare estimates that it could support approximately 90,000 jobs by financial year 2025 from an financial year 2020 baseline of 6,000, with B2C and B2B segments contributing by 50 per cent each to jobs creation.
  • Depth: The job creation enabled by Loadshare will primarily be part-time and indirect (i.e. through partners). Given the high level of unemployment in Loadshare’s markets and that 25 per cent of delivery staff accessed their first formal employment opportunity through Loadshare’s delivery partners, we still expect the increased earnings to be material. Average annual earnings per delivery executives is $630 vs poverty line of $200 per annum in India’s urban areas and $168 per annum in rural areas. Delivery staff also receive significant training which can help them progress to other jobs, as well as financing support to acquire productive assets.
  • Duration: Employment growth is expected to be material as soon as financial year 2021 and the impact is expected to be sustained over the life of the company.
Grid Score Contribution

3.0

Market context: There is a lack of capital for early stage ventures in India. 2015-2018 CAGR growth for Series B financing was only 3 per cent by value and 2 per cent by volume vs 15 per cent by value and 13 per cent by volume for mega venture capital (over $100 million).

To help us direct our investments, we use a tool called the Development Impact Grid. The Grid scores every investment we plan out of a score of four, based on two factors: the difficulty of investing in the country and whether investment in that sector will lead to jobs.

  • Value-add: CDC and Loadshare will co-design and execute a technical assistance programme to help improve job quality for delivery partners’ employees and help Loadshare to indirectly attract, enable, and retain talents from across the country, which is core to the company’s business model. This project will be included in the broader environmental and social plan developed to reduce execution and negative impact risks.
Risk
  • Execution: Relates to the probability of Loadshare’s successful scale-up particularly outside of the north east India region. This risk is aligned with commercial risks and can be mitigated through CDC and Stellaris’ strategic value-add.
  • Alignment: Relates to the probability of Loadshare pivoting towards larger scale logistics services in more developed Indian states, which could dilute the impact thesis, particularly in the B2B segment. This risk is inversely correlated to commercial risks and currently mitigated by the alignment of the sponsor’s long-term vision with CDC’s investment thesis and the business’ current financial health. This risk will be monitored through standard monitoring processes.

Environmental and social aspects

As a co-investment under our venture capital scale-up programme, we worked collaboratively with Stellaris Venture Partners (our co-investment partner) to agree an environmental and social (E&S) action plan with Loadshare. Key items focused on developing an E&S management system, labour standards in the direct and indirect workforce, occupational health and safety, and road safety.

Key facts

Status:
Active
Region

Since 2012, we’ve only invested in Africa and South Asia. Investments outside these regions are from our pre-2012 portfolio.

:
South Asia
Countries:
India
Sector

We have seven priority sectors. However, we continue to invest outside these sectors, largely in the most challenging regions, as new investment supporting any sector helps to underpin the private sector, and create jobs and livelihoods for people.

:
Communications and IT Services
Investment type

We provide capital in three broad ways: direct equity, debt, and intermediated equity (principally through investment funds).

:
Co-Investments Equity
Start date

For direct investments, this is the date CDC committed capital to the business or project.

For funds, this is the date that CDC committed capital to the fund.

For underlying fund investments, this is the date that the fund invested capital into the business.e

:
March 2020
Amount

For direct investments, this is the total amount that CDC has committed to the business or project (it may be a combination of equity and debt).

For funds, this is the total amount that CDC has committed to the fund.

:
$2m
Domicile

This is the investee company’s place of incorporation; or a fund’s jurisdiction.

:
India