Suman Rayamajhi is the Managing Director of Upaya and has over 20 years of experience in the corporate, telecom, startup, equity, and financial sectors in Nepal. Upaya is an online logistics company operating in various cities in Nepal. Suman had also worked as Chief Financial Officer in Smart Telecom and had been a key management team of Smart to operationalize the company with the 4G launch in major cities of Nepal and raising the fund for the network expansion. He is also the founder of Eos Advisors, a boutique investment advisory company, where his expertise lies in setting up & operationalizing PE/venture funds, due diligence, transactions advisory, and deal structuring. In a conversation with The Annapurna Express, Rayamajhi talked about Upaya, the challenges of running a logistics company, and the company's future plans. Excerpts:

It’s been over four years since Upaya started its operations. How do you reflect on the growth of the company in this period?

Upaya started its operations in 2018 and has seen rapid growth, particularly in the last 18 months. The company was founded with the aim of addressing the inefficiencies in the logistics industry in Nepal. We recognized the challenges faced by business owners in securing vehicles for delivery and the lack of work for driver partners. Through extensive research, Upaya was established with a focus on four-wheeler delivery services through its on-demand service. As the business grew, the company expanded into the two-wheeler segment and expanded its operations to cover the entire country. The company has also established its own fulfillment center and acquired a transportation company to enable intercity transport now. Today, Upaya has a daily average of over 1,000 trips and 2,500 orders. The company has formed partnerships with organizations such as Sipradi, Loconav, and UK Aid, among others. With a team that has grown from a few people to 170 employees across Nepal, Upaya was awarded the "Best Startup of the Year 2021." Upaya's growth has enabled it to extend logistics operations to all verticals, including market aggregation where you can book vehicles ranging from two-wheelers to 21-ton trucks in any city in Nepal, and end-to-end operations where you can send goods to 100 pin codes of the country. The only backward integration remaining is in warehousing, which the company is working towards fulfilling through the establishment of a world-class warehousing and fulfillment facility. What challenges are there to running a logistics services company? How Upaya overcame the challenges? One of the biggest challenges in the logistics sector is the unorganized nature and lack of standardization. To address these challenges, Upaya has focused on professionalism and transparency. The company has used technology to improve transparency, standardization, and traceability. There have been no significant infrastructure investments to date in the logistics sector in Nepal. Upaya is committed to making infrastructural investments together with technological investments in the logistics sector so as to collaborate with all the existing logistics players. The company has standardized transportation through its Trip Management System and the GPS system. In the logistics industry, the first-mile is the process of collecting packages from the sender and preparing them for transportation. Mid-mile is the process of transporting packages from one hub to another, and the last-mile is the process of delivering packages to the recipient. We are also working on Upaya Connect where we are building the mid-mile SaaS application. We have planned various initiatives to improve efficiency and transparency in each of these stages of the logistics process. Upaya has been working on sector training and capacity building for its delivery partners. For example, the company has provided driver and rider partner training under the UKAID SEEP program to more than 2,000 driver & rider partners, which covers financial literacy, digital literacy, and customer service. This has already led to improvements in the intracity pickup category, and Upaya plans to extend this to the transportation side and intercity trucks in the future. We have also started our Upaya Alliance project where all the transport companies can come and work together sharing our technological & infrastructural resources. This will enable the transporter to expand their reach to routes and cities where they would not have been able to reach before and build their capacity to provide better services to their customers. Getting all these transporters, truck owners, driver partners working under one umbrella, using uniform practice, and operating the same technology will be the biggest challenge as well as the opportunity for Upaya. What were the impacts of the Covid-19 pandemic on the company's business operation? How fast was the recovery in business? The Covid-19 pandemic had a big impact on Upaya's business operations and recovery is taking time. The current market sentiments are low, recovery of due payment is difficult, and customers are holding their growth. The pandemic combined with the Ukraine/Russia war has created a negative impact on Nepal’s economy. However, the company is still trying to grow under a collaboration model with franchise partners, business partners, and alliance partners under these circumstances. Over the past year, we've seen a sharp contraction in business activities and market demand. How has the economic slowdown affected the company's business? If the business was operating normally, the company would have grown tenfold. However, with the current demand being low, Upaya is focusing on strengthening its backend, systems, capacity, and relationships with partners like drivers, fleet owners, transporters, and franchises. The company believes that the current scenario will be overcome in the next 12 months and that once the situation returns to normal, it can grow further as planned. It is time to “build your system”. Upaya in June 2021 and January 2023 received funding from Dolma Impact Fund and Nepal Infrastructures Investment Fund respectively. How did the funding in 2021 help Upaya expand its services in different parts of the country? How has the company planned to spend the funding it has received in the latest series? The funding received from Dolma Impact Fund in 2021 helped Upaya expand its operations into four verticals, namely Upaya On-Demand, Mero Upaya, Upaya Fulfillment, and Upaya Transport. This has enabled us to become a national logistics company from a company operating in Kathmandu Valley. Upaya On Demand is a quick delivery service for express delivery needs. Clients can book a two-wheeler or four-wheeler delivery through the Upaya app and track the delivery in real time. Mero Upaya is a custom logistics service for clients with specific requirements. Upaya provides a customized solution with a contractual agreement and a dashboard to track vehicles. This service allows clients to outsource their logistics and focus on their core business. These two verticals constitute our Market Aggregation model. On the other hand, Upaya Fulfillment is an affordable delivery service for deliveries to multiple places in Nepal. It's ideal for businesses that need to distribute packages to customers or for online businesses looking for delivery services at an affordable price. Upaya Transport is a delivery service for bulk goods all over Nepal. Clients can track their deliveries and have hassle-free delivery with updates from Upaya on the status of their deliveries. The service covers the entire delivery process, from the client to the transport and then to the final destination. These two verticals on the other hand cover our End-to-End (E2E) model. The funding received from Nepal Infrastructures Investment Fund in 2023 is being used to expand the business and move the company toward profitability. As a tech-enabled logistics services company, what are the major areas of focus for Upaya currently? What new opportunities the company is looking to explore? Upaya is not a tech-enabled logistics company but a logistics company enabled by tech. The two look the same but it's different. We are first a logistics company rather than a tech startup. The company uses technology in combination with infrastructural support to make logistics efficient, transparent, and standardized. The next big focus of Upaya is to build state-of-the-art warehouses in five different locations in the country. This is a part of building Upaya 2.0 where we plan to build automated warehouses along with reaching 300 plus pin codes delivery points for delivery all across the country. The company is currently in the process of raising Series B funding, which we expect to close by the end of 2023. How conducive are the policies of the government for a company like Upaya? Currently, the logistics sector is yet to be defined as an "industry" in Nepal, resulting in a fragmented policy environment. Upaya plans to work with key stakeholders such as the government, transport associations, and other industry-related organizations to create a more conducive environment. The company's approach to this challenge is centered on collaboration and building relationships with existing players in the sector. By doing so, Upaya aims to jointly grow the sector while also helping existing players leverage its technologies for mutual growth. The government recently introduced the Trade Logistics Policy. How effective do you think the policy can be to minimize the costs associated with trade and production?  The Trade Logistics Policy introduced by the government is an important step towards creating a conducive business environment for logistics companies. However, its effectiveness in minimizing the costs associated with trade and production depends on its successful implementation. For this, coordination and collaboration by all the stakeholders, including the government, logistics companies, and the transportation sector, is crucial. A well-developed legal infrastructure is also necessary to foster a good business environment for logistics companies. This includes clear regulations, procedures, and processes for setting up, operating and scaling up logistics businesses, as well as policies for protecting the rights of the businesses. India introduced the National Logistics Policy to lower the cost of logistics from its current 14 percent of GDP to less than 10 percent which highlights the importance of an integrated approach to reducing the costs associated with trade and production. In Nepal, the cost of logistics currently stands at 20-22 percent which is high and reducing it would greatly benefit the economy and all the consumers. The current draft Trade Logistics Policy 2079 is being introduced by the government, that focuses on three objectives:  

1. Focused and consolidated development of logistics infrastructure
2. Improvement of management of logistic networks through technology
3. Create better governance of the logistics industry

Proper integration of all the logistics loose ends through technology and the building of better infrastructure will definitely reduce the cost of trade & production. Upaya’s growth plan is also aligned with the priorities laid out including infrastructure, technology service, and governance. The company aims to work closely with all stakeholders, especially with the government to create a supportive environment that helps lower the cost of logistics and promote sustainable growth in the sector.