Deal focus: Qiming targets last-mile delivery

Shanghai-based mobile app Linqu - also known as Linjia.me - focuses exclusively on this final leg of the supply chain, shipping not only food but also a variety of daily necessities from pharmacies, convenience stores and grocery shops. It will deliver within 30 minutes of an order being placed.

Referred by existing investor Shanda Capital, Qiming Venture Partners has led a Series B round worth tens of millions of dollars for Linqu, with IDG Capital Partners also participating. IDG and Shanda provided the Series A round in May.

"It's a different business model to food ordering platforms like Ele.me. Their model involves taking delivery people from restaurants and putting them onto a platform. With Linqu, anyone can join in. While Ele.me's delivery model is more like outsourcing, Linqu is like crowdsouring," says Helen Wong, a partner at Qiming.

Ele.me, which recently raised $630 million, claims to have around 4,000 full-time couriers in first and second-tier cities and a network of over 200,000 part-time delivery people through arrangements with third-party providers. Having started out as an intermediary, processing orders with restaurants responsible for delivering their own food, Ele.me built its own delivery team in order to offer a higher quality service to white-collar customers.

On Linqu's platform, there are no permanent employees. Anyone can apply for a part-time job with the company and compensation is based on a customer rating system. In this way, couriers are incentivized to provide a better and quicker service because it can result in a higher salary. Linqu allocates jobs to couriers according to their locations, availability and a performance rating that is tracked online.

The one-year-old start-up at present provides services in Shanghai and Beijing, and wants to expand into other top-tier cities such as Guangzhou and Hangzhou. It has more than 25,000 couriers registered on the platform, and approximately 2,500 are active on a daily basis. Linqu claims to receive about 16,000 orders every day, with each customer spending RMB50 ($8) on average.

"There is a lot of inefficiency in the logistics space, and that's why there is increasing interest from investors," says Wang. "Last mile services are growing very fast in different verticals. Some start-ups just focus on delivering drugs, but we want to invest in a platform that provides general services, because usage frequency is very important. We start by providing general delivery services in a locality, and then we can branch out into specific categories like food and drugs."

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