News / Shypmax said to be latest in list of failing Indian tech start-ups

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Indian logistics tech start-up Shypmax seems set to follow in Freightwalla’s footsteps: the notable digital freight forwarder shut operations a year ago amid financial distress.

AI-backed cross-border logistics platform Shypmax was founded in 2020, with Nisschal Jaain said to be its driving force and industry face.

But operations have reportedly hit a barrier as trade complaints against the Gurugram-based firm mount, due to its alleged failure to meet contractual obligations to clients, according to industry sources.

Social media indicates the company has ceased responding to customer enquiries or concerns, and that many shippers claim they have lost significant amounts.

One online customer claimed: “Fed up with their poor service, we decided to stop doing business with them six months ago,” and another, Alok Sharma, tweeted: “Lost four packages to the US and their customer service is the worst.”

The Nisschal Jaain-led team is believed to have had its logistics tech venture debut with Shyplite, the platform being specifically designed for the domestic market. Now, according to reports, Temasek-backed Indian logistics aggregator Shiprocket was in talks to acquire Shyplite, which has a “permanently closed” label on the Google search map.

Positioning itself as an LPaaS (logistics platform as a service) solutions provider, the founders claimed Shypmax had a workforce of some 200 and thousands of exporters as clients.

In December 2021, Shypmax announced an exclusive partnership with Netherlands-based B2C Europe, a Maersk unit specialising in B2C parcel delivery services in Europe. It claimed the collaboration would help Indian businesses to deliver their products across Europe and the UK in a cost-efficient manner under a single-window, integrated platform.

That followed Shypmax’s strategic co-operation with the Federation of Indian Export Organisations (FIEO) to facilitate trade flows on the back of technology and cost advantages.

“Shypmax works with thousands of exporters and has been instrumental in providing simplified cross-border deliveries with its AI-driven platform and hassle-free shipping solutions to over 220 countries,” the start-up claimed when announcing the tie-up.

FIEO also portrayed the association as one that could drive huge potential for e-commerce retail exports out of India. But the state of this trade arrangement remains elusive, as does that of the Dutch partnership.

On a broader note, the Shypmax case is another sign that the logistics tech ecosystem across markets is facing funding challenges, with a list of failed start-ups lengthening. 

Vineet Malhotra, co-founder and director of Mumbai-based Kale Logistics Solutions, agreed.  He noted that many marketplace start-ups, once considered investor favourites, had struggled to tame the cash-burn-intensive nature of the space.

“With industry uncertainty looming, reliance on digital adoption, robust infrastructure, supportive regulations and smooth cross-border operations remain paramount for digital ventures,” said Mr Malhotra.  “Any disruptions in these elements could significantly impact market operations.”

From an Indian context, one outlier at the moment, amid the gloomy sentiment, appears to be Chennai-based Wiz Freight, which recently secured $15m in a fresh Series B funding round, led by Japan-based SBI Investment.

“The investment not only strengthens Wiz’s financial position but also propels the company into an exciting phase of expansion, innovation, and strategic partnerships,” it said. “With a presence in five countries, Wiz is gearing up to expand into five more, with 10 new locations, across Saudi Arabia, Vietnam, China, Malaysia and parts of Europe.” 

Wiz has acquired the Indian leg of Swiss firm M+R Spedag Logistics and Mumbai-based ATZ Shipping in an attempt to diversify into warehousing verticals.