British International Investment

Loadshare Networks Private Limited

South AsiaCommunications & 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

Description of the investment.

This investment is part of our 'VC Scale-up' strategy to support the growth of the most impactful companies in our venture capital funds portfolio. We invested in the business 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 information

Applies to investments made from 2019 onwards. The tabs in this section define what we expect to achieve through the investment, assessing the potential impact of the investment against six dimensions of impact. You can find more details on our methodology of assessing impact here.

What?

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

How?

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.

Who?

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.

How much?

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.

Contribution/additionality

Contribution/additionality
  • 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.

Grid score

Grid Score

To help us direct our investments, we previously used a tool called the Development Impact Grid. It scored investments out of four, based on two factors: the difficulty of investing in a country and the propensity of the sector to generate employment. This tool was used for investments until the end of 2021. Since 2022 it has been replaced by the Impact Score.

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).

Risk

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.

Environmental and social information

  • Environmental and social summary

    A high-level description of the environmental and social aspects of the investment. This may include a summary of key environmental and social risks identified during environmental and social due diligence (ESDD); key elements of an environmental and social action plan (ESAP); or ways in which we plan to support the investee improve environmental and social standards, such as through their environmental and social management system (ESMS); as well as any other priority areas agreed with the investee.

  • Environmental and social risk

    A risk category rating, which indicates the level of environmental and social risk associated with an investment. For an explanation of the categorisations used, see here. We consistently provide an environmental and social risk category for all investments screened from 2023 onwards.

Environmental and social summary

We partnered with our fund manager to co-invest in this company, including by relying on our fund manager's ESDD. BII developed an environmental and social action plan with the investee, which included hiring E&S capacity, developing an ESMS and mitigation measures associated with labour and working conditions, independent contractors and road safety.

Environmental and social risk

Medium-Low

Reporting and Complaints Mechanism

The Reporting and Complaints Mechanism allows anyone outside BII to report alleged breaches of the business integrity or environmental and social provisions of BII’s Policy on Responsible Investing. This includes breaches made by BII, a BII investee, or a portfolio company of a fund in which BII has invested. The Reporting and Complaints Mechanism Rules are available here. Reports and complaints can be submitted by email to [email protected] or by mail. See more details on our Reporting and Complaints Mechanism here.

For any other general enquiries contact us at [email protected]

  • Key facts

    Last updated

    When the last quarterly update of the website database occurred.

    :
    June 2024
    Project number

    An identifier number shared by investments in the same project.

    :
    D4371
    Status

    The current status of the investment (green flag for active and red flag for exited).

    :
    Active
    Region

    The geographical region where the country is located. We currently invest in Africa, South Asia, South East Asia and the Caribbean. In 2023, BII’s investment mandate was extended allowing it to invest in regional funds linked to Ukraine, with the majority of activity expected to begin post-war. Investments outside these regions were made prior to 2012 under previous investment mandates.

    :
    South Asia
    Country

    The countries where the investment delivers impact. Where impact is delivered in multiple countries, this is indicated.

    :
    India
    Sector

    We prioritise those sectors that facilitate development and need our capital the most. Our priority sectors contribute towards many of the Sustainable Development Goals. They range from investing in the power infrastructure that will provide people with better access to electricity, to investing in financial institutions that direct capital to the individuals and businesses that need it the most.

    :
    Communications & IT services

    We provide capital in the following ways: directly – through direct equity, direct debt, guarantees and other non-intermediated financial instruments; and indirectly – principally through investment funds.

    For direct investments and fund investments, this is the date BII committed capital to the investments. This is typically the date on which legal agreements are signed by all parties.

    For the portfolio companies of our fund investments, this is the date (either the month or the quarter) on which the fund committed capital to the portfolio company.

    For direct equity investments, this is the date at which British International Investment exited the investment.

    For debt investments, this is the date at which the final debt repayment was made.

    For funds, this is the date at which the fund was terminated.

    For underlying fund investments, this is the date at which the fund manager exited the investment.

    The total amount committed, per financial instrument, per investment, on the date BII becomes subject to a binding legal obligation to provide funding or assume a contingent liability. This information is provided in US dollars.

    For direct investments, this is the amount that BII has committed to the business or project. For fund investments, this is the amount BII has committed to the fund.

    The currency in which the investment was made.

    Investment type :
    Equity
    Start date :
    January 2022
    Amount :
    $4.06m
    Currency of investment :
    INR
    Domicile

    The company or investment fund’s place of incorporation.

    :
    India

Related investments made by BII into this company:

Investment name Commitment Region Sector Start date Status
Investment 01 $2m South Asia Communications & IT services March 2020 Active

Subscribe to receive our latest news and updates