While Hong Kong-based unicorn Lalamove has been steadily growing its business across hundreds of cities, it didn’t have any presence in the U.S. – until recently.
Towards the end of last year, the on-demand logistics startup set up shop in North Texas. Now, Lalamove is using the city as its base of operations in the U.S. And for now, as Lalamove looks to expand more into the country, it’s moving forward with plans to make DFW its central hub for its U.S. operations.
“Texas in general, from a cost-talent-opportunity perspective, really hit the sweet spot,” Blake Larson, international managing director at Lalamove who is now based in Dallas, told NTX Inno.
After launching more than seven years ago, Lalamove first began offering its service in DFW in October. It quickly followed that move with expansions into Houston and Chicago. Since then, it has amassed a 20-person team, including HR, marketing, and finance, that support all of the company’s U.S. operations that currently operate out of Common Desk in Richardson.
Larson said the company had long planned to enter the U.S. market eventually. However, before the pandemic made acquiring visas and international travel increasingly difficult, the company decided to focus here rather than where it was looking in places like Africa and Australia.
“We really like to get our footing solid, get the team in place to understand what’s really important to our drivers, what’s really important to our business users, and what’s really important to the consumers that are using us,” Larson said. “Is it about money? Is it about time? Is it about safety? Is it about reliability? They’re all important, but maybe in different proportions depending on different markets”.
The company passed on initially launching in the larger coastal hubs of California and New York. At the time, California was considering Proposition 22, which would make gig workers employees rather than independent contractors. New York because of the high cost of doing business there, in addition to stronger regulations.
Larson said Dallas made the most sense. In addition to some of the more common reasons companies give for relocating to the region like a business-friendly environment and a wealth of tech talent, Larson said Lalamove also chose DFW because of its growing innovation ecosystem and its location as a major shipping hub, calling it the “entryway to the Texas Triangle” from the north.
“Dallas is a huge hub. You’ve got American Airlines being headquartered here. You have a ton of freight coming in and out. The same thing with the road network, you’ve got all the major highways coming through Dallas,” Larson said, adding he recently purchased a home in the region. “Texas is still booming, Dallas is still booming, and I’m quite bullish on being here”.
The entrance onto the North Texas and U.S. scene comes on the heels of a massive $515 million Series E round the company raised from existing backers Sequoia Capital China, Hillhouse Capital, and Shunwei Capital, bringing its total to nearly $977 million and giving it a valuation of about $8 billion, according to Bloomberg.
Even before that, Lalamove has been growing at a remarkable clip. The company hit unicorn status in 2019 with a $300M Series D. It now operates in more than 350 cities, most of which are in Asia and Latin America, and has a workforce of about 10,000. And the pandemic has only helped to accelerate that. The company saw its order volume pick up by about 82 percent year-over-year in 2020, increasing its year-over-year revenue by about 250 percent, Larson said. Although, he declined to give specific numbers.
Locally, Lalamove has seen a user increase by about 145 percent between its October launch in Dallas and January, with nearly 20,000 users installing the app. The company has also signed up about 5,000 U.S. drivers in the past three months, Larson said.
“A lot of people are using us to facilitate the movement of the good, so where we’re different really is we’re not trying to do the e-commerce shopping part of it, we’re just trying to enable the e-commerce or the delivery part of it,” Larson said.
For now, Lalamove is putting its focus on growing and honing its operations in the three U.S. markets that it’s in. Larson said for the company’s operations in Dallas, that likely means bringing on 10 new hires in another month. Overall, the company said it’s on track to increase its total U.S. workforce by 60 percent in the next three months. From there, Larson said Lalamove plans to be operating in 30 to 50 other U.S. cities within the next 18 to 24 months.
“My hope is to see, at a very local community level, how to support the infrastructure of our cities. If they thrive, we thrive, and that’s how we’ve always gone about it,” Larson said. “The biggest compliment we can ever get from somebody is that they think that our business started there”.
News Source: NTXINNO