Loadshare Networks Private Limited

• 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.

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.

• 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.

• Value additionality: BII 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.

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).

Execution Risk

• 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 BII and Stellaris’ Strategic Value-add.

Alignment Risk

• 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 BII’s investment thesis and the business’ current Financial health. This risk will be monitored through standard monitoring processes.