As the need to adopt more sustainable consumption habits becomes urgent, city dwellers will be pivotal to the transformation of the current economy into a circular one. With this in mind, the founders of Revoolt created Spain's first cloud-based last-mile electric vehicle fleet for grocery deliveries.
Integrating electric vehicle deliveries through IoT, Revoolt enables real-time interaction and tracking for the shoppers at home. Fleet and delivery management is also linked to its business clients' systems via the same connected devices. It also provides drivers with an app to stay abreast of incoming orders. The startup already counts Simply, which is part of French supermarket giant Auchan, as a key client.
About 70% of US consumers will do some of their grocery shopping online, with the spending on online grocery shopping expected to reach US$100bn by 2022–2024, according to a 2018 study by FMI-Nielsen. If the study's conclusions are born out and consumers also continue to seek more sustainable consumption habits, such as eating less meat and avoiding single-use plastics, finding ways to reduce the environmental impact of delivery services will be top of mind for grocery stores.
Revoolt's co-founders CEO Ángel Sánchez and CCO José Barbero, and Investor Relations Manager Andres Burdett, were at Malaga's South Summit Smart Mobility Encounter last month. They spoke to CompassList about why they founded the company and their ambitions for the future.
This interview has been translated from Spanish and edited for clarity.
Q. What is Revoolt and how did it come about?
Ángel Sánchez: Revoolt is a technology startup providing solutions for the last-mile delivery industry. Our initial idea was to work with EV (electric vehicle) manufacturers in Asia, import them to Spain and build a platform that integrates, geo-locates and interconnects them. It was when we noticed a gap in the last-mile logistics market, specifically for grocery stores, that we pivoted to what is Revoolt today.
Andres Burdett: In 2016 we went to Shanghai looking for electric vehicles. We also started to think about the technological aspects and thanks to the previous grocery sector expertise of our co-founder Jose Ubaldo Pedraza, we decided to develop the product to cater to this niche. It was also thanks to him that we launched our first pilot with Simply (Auchan) in Madrid. Since then we have achieved on-boarding traction with around 100 Simply franchisees.
How is the company financed and what has been its growth?
A.B.: Initially we bootstrapped all our funding. In November 2017 we closed a seed round of €150,000 with two private investors, one with experience in urban mobility and one from the insurance sector. That was also when we started to monetize. We launched our first pilot in January 2018 and we closed the year with turnover of €500,000. Traction was rapid.
What is your business model?
A.S.: The charging infrastructure has been one of our biggest struggles. We are monetizing through a pay-per-delivery model. Our platform allows control over an unlimited number of warehouses, vehicles, drivers and customers that pay a fee per each delivery managed by our system.
How does your technology integrate into clients' systems?
A.S.: We developed all our technology in-house with the idea to build a software that connects, but does not substitute our clients’ systems. We integrate our solutions into clients’ systems through APIs to seamlessly manage orders and deliveries.
José Barbero: What is crucial is that thanks to our technology, logistics shift from being an operational process to a strategy process. Shopping experiences today are changing; previously contact with clients came only at the end of a long supply chain and sales process, whereas today [the customer experience] has become the most important element [of the process].
Aside from optimizing overall operations, our technology facilitates client communication. We enabled real-time order tracking and included a feedback and reviews system for product assessment and delivery performance.
What are your plans for expansion?
A.B.: Currently, we operate in Madrid and Zaragoza, and we will be launching soon in Logroño. We also want to extend our coverage to the surrounding areas of Madrid. By the end of the year we are planning to expand to Barcelona, Valencia, Seville, Malaga and Bilbao.
Our focus is to expand our position in Spain, but we are also considering international expansion, most probably to France and Latin America. LATAM, because we received many leads interested for implementing our solutions there; and France because of its proximity and volumes. Simply (Auchan) is our first client and is a French brand; they’ve already presented our project at an international board meeting.
From a financial perspective, we have already broken even even and hope to reach turnover of €1.5m by the end of this year. We are looking to raise a second funding round of about €500,000 to €1m to support the growth of our platform; we have a clear vision and strategy to scale up.
What has been your most important learning to date?
A.S.: Digitalization leads to optimization. An example is one of our clients that operated as traditional logistics provider; once he shifted to Revoolt, he reduced his workforce by 40% at the same time increasing the number of deliveries by 10%.
In what other ways is Revoolt different from your competitors?
A.S.: We have our own fleets and team of riders, that’s another differentiating factor in our model. We strive to be part of a buying experience that is an extension of our clients’ processes. Having our own team of riders allows us to monitor and guarantee a certain level of operational standards that wouldn’t be attainable with autonomous riders.
A.B.: We built a platform that works as marketplace wherein we aggregate local logistics operators looking to offer our services in their area. We are thinking about franchising models to ensure and maintain control over the quality of services provided.
The sustainable aspect of your service is a strong value-add to your offer…
A.S. We are facing challenges that traditional logistics players haven’t faced before. We are among the first movers in sustainable last-mile logistics and paving the way for those players that will come next.
A.B.: Sustainability is also important for our workforce. We give our employees the possibility to learn and to develop a career within green logistics so that if one day they decide to leave Revoolt, they can bring the expertise and lessons learned into a new job. This improves our client services and contributes to knowledge-sharing within the industry, which is extremely important.
