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Forbes
08-08-2025
- Business
- Forbes
How Scaling Deep Beats Scaling Up Fast — Lessons From Uber And Routematic
In a business world obsessed with blitzscaling, one CEO is advocating for a different approach. At a recent executive event hosted by venture capital firm Shift4Good, Sriram Kannan, CEO and cofounder of Routematic, told his peers that his company's growth has come not from chasing new markets, but first mastering a few. Routematic has deepened its service in just five Indian cities, building density, loyalty, and profitability before expanding further. The message surprised his peers who assumed growth is about expanding the customer base, not deepening the current base. Kannan's message jars in an era where the default playbook is Silicon Valley orthodoxy: raise capital, expand everywhere, dominate markets. Scaling deep doesn't mean slow growth; it means more measured and resilient growth. Kannan's argument warrants attention, especially given the mounting evidence that rapid expansion can destroy more value for companies and communities than it creates. The Allure of Scaling Up and Fast Almost every startup founder dreams of explosive growth and a lucrative exit. The formula is straightforward—raise capital, expand geographically, dominate markets. But fast geographic scaling multiplies complexity—regulatory environments, customer expectations, cultural norms—and often requires huge capital infusions before revenues catch up. Yet this approach regularly destroys companies. Consider WeWork's spectacular implosion in just nine years. The company expanded from one New York office to 528 locations across 29 countries. When it attempted to go public, investors discovered a company hemorrhaging cash with no path to profitability. Instead of a lucrative IPO, WeWork filed for bankruptcy. WeWork isn't an outlier. Rapid growth creates predictable problems: executives lose operational control, customer service deteriorates, and organizations become overextended and unstable. Companies get ahead of their skis, moving faster than their ability to manage effectively. The Alternative: Scaling Deep Some markets reward depth over breadth. Scaling deep means building stronger ties within existing communities rather than rushing to new geographies. Researchers Dr. Suntae Kim and Dr. Anna Kim examined this phenomenon through two Detroit-based business accelerators. One pursued rapid geographic expansion; the other focused on deepening local relationships. Their research, published in the Academy of Management Journal and the Harvard Business Review, revealed that ventures scaling deep created jobs, products, and spillover effects that stayed local and addressed community-specific problems. Deep scaling encourages companies to use resources efficiently—either by reaching full capacity or finding creative ways to repurpose existing assets. Deep scaling is often more cost-effective than geographic expansion, leaving more cash for reinvestment rather than requiring external funding. This approach can actually contribute more to sustainable competitive advantage than spreading thin across markets, as competitors find it more difficult to penetrate the market. Uber vs Routematic The contrast between Uber and Routematic reveals two fundamentally different approaches to growth—one focused on operational depth, the other on rapid geographic breadth. Uber is a consumer-facing platform that connects individual riders with drivers for on-demand travel. Its core business is a real-time marketplace, matching unpredictable demand (from airport trips to nightlife to daily commutes) with flexible supply. Uber does not serve enterprise clients with known scheduling needs, but rather operates in a volatile consumer space. Uber exemplifies the Silicon Valley scaling playbook. After launching in 2010 with $1.25 million in seed funding, Uber expanded to five U.S. cities within its first year. By 2014, it was launching in one new city every single day. This hypergrowth strategy required massive capital injections. Prior to its IPO in 2019, Uber had raised over $12 billion, although much of its capital injections are undisclosed. To put color on this number, Uber made a profit for the first time in 15 years in 2023. Uber CEO said in a 2023 earnings call that the first-ever profits proved 'that we can continue to generate strong profitable growth at scale.' Today, Uber operates in more than 71 countries in more than 15,000 cities, yet many markets remain unprofitable. Routematic, by contrast, is an AI-powered enterprise transportation services firm that partners with information technology companies to shuttle employees to and from work. Its clients, like Infosys, operate around the clock, with as many as 49 different shift start times in a single day. Routematic uses real-time traffic data and AI-driven routing to ensure employees arrive punctually and safely. It operates as a B2B service that companies purchase for their workforce—offering predictable demand patterns, recurring revenue, and optimized fleet management. Routematic's growth strategy was the opposite of Uber's. Routematic mastered local markets before expanding outward. Starting with just 10 cars and one client in Pune, the company spent two years optimizing fleet utilization across multiple corporate clients with different shift patterns. It expanded only after it was profitable in Pune by expanding next to Bangalore and then to other cities. Today, Routematic operates in just five Indian cities. Its measured growth to date has built a robust foundation for further expansion. As Routematic grows, it will continue to build its organizational assets, rather than scaling so quickly that it puts them at risk. The contrast between Routematic and Uber is stark: Even though Routematic operates in only 5 Indian cities for fleet services relative to Uber's 110+, Routematic has one-fifth of Uber's total Indian ride volume. Whereas Uber is unprofitable in many of the cities it operates, Routematic ensures profitability in every location it operates. Its deep understanding of local transportation patterns, consistent service delivery to corporate clients, and disciplined expansion strategy have enabled high asset utilization and strong margins. Two companies, two models. One is focused on transactions and scale; the other on relationships and resilience. The Architecture of Scaling Deep Routematic's success stems from three key innovations that would be impossible with rapid geographic expansion. These are systemic enablers of profitability for deep scaling. 1. Grow from profits, not investors' cash: Uber's approach to funding expansion relies on massive venture capital infusions, whereas Routematic operated profitably in Pune before expanding to Bangalore. As CEO Sriram Kannan explains: "You have to improve your the knife, then you can deploy it in any other city." This approach builds confidence among employees, customers, and investors while eliminating the financial risk of burning through investor capital across unproven markets. 2. Master one market before opening others: Uber's operational model prioritizes rapid market entry with standardized processes that can be quickly deployed across new cities, often learning and adapting on the fly while managing the complexity of hundreds of simultaneous markets. Routematic took the opposite approach: starting with just 10 cars and one client in Pune, the company faced a utilization challenge where corporate transportation demand is "lumpy"—many employees need rides simultaneously, leaving vehicles idle between peak periods. Kannan spent two years aggregating multiple corporate clients with different shift patterns, to achieve higher vehicle utilization rates throughout 12-hour shifts. This deep understanding of local transportation patterns would have been difficult with rapid multi-city expansion. 3. Focus on relationships, not transactions: Uber treats each ride as a separate transaction, with drivers competing for trips across multiple platforms and bearing the income uncertainty of gig work. Uber customers and drivers choose between multiple apps simultaneously, including Ola and Rapido, demonstrating little loyalty. Instead, Routematic focuses on relationships with businesses and drivers. It offers reliable transportation services to a business, so the business increasingly relies on Routematic as an increasingly sole provider. Routematic also guarantees drivers 12-hour shifts regardless of trip volume. This creates a stable income foundation that is a magnet for the best drivers, while enabling sophisticated route optimization across multiple clients. Routematic has built intimate understanding of local market conditions, while building strong driver loyalty. The Community-Wide Benefits of Scaling Deep The benefits to communities of scaling deep should not be underestimated. For drivers, Routematic offers a stable income, whereas Uber offers gig work. Routematic builds relationships and networks with its customers and drivers, offering stable service for businesses and stable income for drivers. This provides drivers a much better standard of living for a sustained period of time. Further, the Routematic approach opens up opportunities to reduce its environmental footprint. The efficient routing service means that cars are filled to capacity, both taking employees to their shift and taking them home. Efficient routing eliminates "dry runs" (empty vehicle travel), reducing both emissions and congestion. As well, the 12-hour shift has permitted rapid electric vehicle adoption. Routematic has adopted a fleet of EVs, which they are rolling out in the National Capital Region (Delhi). Routematic leases its EVs to drivers, absorbing higher upfront costs while benefiting from lower operating expenses. Scaling Deep Means Higher Margins--not Lower Profits It's easy to confuse a step-wise, measured growth with lower profits. In fact, it can be quite the opposite. Scaling deep challenges fundamental assumptions about speed and success. Instead of measuring progress as the number of customers or transactions, scaling deep measures success through operational excellence, customer satisfaction, and community impact. Routematic has achieved 8-10% month-over-month revenue growth while maintaining profitability. By scaling deep, Routematic has built a sustainable competitive advantage, while also contributing to stronger communities. This dual focus on corporate performance and community resilience creates a compelling strategic advantage for any firm. As venture capital grows scarcer and more expensive, scaling deep offers a compelling alternative to traditional expansion strategies. It delivers operational excellence, employee stability, customer loyalty, and market resilience. Sometimes the smartest path to growing the firm and its profits means going deeper, not wider. I developed this story, based on insights gained through a presentation to Shift4Good CEOs, a private interview with Routematic CEO Sriram Kannan, and additional desktop research. I chair Shift4Good's impact committee, but have no financial interests in its investments. Fact checking by Minali Giani.
Yahoo
16-07-2025
- Business
- Yahoo
Green mobility insurer Laka garners $10.4m in Series B round
Laka, a UK-based insurance company specialising in green mobility, has secured $10.4m in its Series B funding round to boost profitability and growth in Europe. The company intends to use the investment to extend its operations across nine EU markets and the UK. The funding round was co-led by investment entities Shift4Good and MS&AD Ventures. It also saw participation from a diverse group of investors, including Ponooc, Achmea Innovation Fund, Autotech Ventures, Motive Partners, Creandum, LocalGlobe, 1818 Ventures, and Republic. Laka CEO and co-founder Tobias Taupitz said: 'Reaching this milestone marks a pivotal moment in Laka's journey - it's a testament to the trust we've built with riders, retailers, and corporate partners across Europe. 'This new financing will enable us to deepen that trust, expand our category-defining role in green mobility insurance, and build towards profitability, while pursuing further acquisitions that consolidate this fragmented market.' Laka also noted that it is in the process of finalising a debt financing arrangement to support its ongoing merger and acquisition strategy. It also indicated plans to pursue an additional extension round in 2025. Over the past 18 months, Laka has executed three mergers and acquisitions, including the purchase of Luko's e-scooter portfolio from Allianz Direct, the bike insurance renewal rights from CoverCloud, and the acquisition of Cylantro. Furthermore, the company also provides personal liability, health and recovery insurance, and services for commercial partners. Beyond its insurance products, Laka offers services that include assistance in the recovery of stolen or damaged bikes and e-scooters, replacement of stolen bikes, and the salvaging and recycling of bike parts. "Green mobility insurer Laka garners $10.4m in Series B round " was originally created and published by Life Insurance International, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
The Hindu
07-05-2025
- Automotive
- The Hindu
Bengaluru firm Routematic raises $40 mn from Fullerton Carbon Action Fund, Shift4Good
City-based Routematic, an AI-driven Corporate Transport-as-a-Service firm on Wednesday raised $40 million in Series C funding round led by Fullerton Carbon Action Fund and Shift4Good. With its AI-powered SaaS platform already streamlining corporate transportation, Routematic's next phase focus would be on establishing city-level command centre and these hubs would enable demand-responsive fleet management at scale, enhancing the employee commute experience while significantly reducing transportation costs for enterprises. Routematic is also planning to convert 30% of its fleet into EVs to help its clients achieve ESG goals, said a release. As per data shared by Routematic, India's employee transportation market is expected to reach $13.2 billion by 2030, driven by factors such as massive business growth in GCCs (global capability centres), focus on employee well-being, and sustainability. Routematic has plans to capitalise on this momentum by scaling its corporate commute services, with plans to expand its fleet to over 10,000 vehicles across the top five cities by March 2026. Its enterprise mobility solutions currently support the work commute of over 300,000 employees, in five million trips in a month.
Entrepreneur
07-05-2025
- Automotive
- Entrepreneur
Routematic Raises USD 40 Mn Series C from Fullerton and Shift4Good to Drive EV Expansion and City Growth
The capital infusion will be used to expand operations across India's top five cities, scale the fleet to 10,000 vehicles by March 2026, and convert 30% of its fleet to electric vehicles (EVs). You're reading Entrepreneur India, an international franchise of Entrepreneur Media. Corporate mobility solutions provider Routematic has secured USD 40 million in a Series C funding round led by Fullerton Carbon Action Fund and Shift4Good, with Ostara Advisors acting as the exclusive financial advisor. The capital infusion will be used to expand operations across India's top five cities, scale the fleet to 10,000 vehicles by March 2026, and convert 30% of its fleet to electric vehicles (EVs). The company also plans to establish new city-level command centres, with Delhi-NCR next on the radar after successful rollouts in Bengaluru, Pune, and Hyderabad. Sriram Kannan, Founder and CEO of Routematic, said, "We are grateful for our investors' trust as we drive the future of corporate transportation. This investment will enable us to capitalize on the growing demand and further strengthen our leadership in sustainable corporate mobility." Founded in 2013, Routematic offers AI-driven corporate mobility solutions, combining SaaS-based commute management with Transport-as-a-Service (TaaS). With operations in over 23 Indian cities, Routematic services 300+ enterprise clients and handles 5 million monthly trips, offering safe, reliable, and sustainable commuting options to 300,000+ users. Routematic's platform automates demand-supply matching, dispatch, and dynamic routing, significantly reducing transport costs and enhancing commuter safety. The company has previously raised about USD 6 million from investors including Blume Ventures, VAMM Ventures, and Bosch. Kavitha Ramachandragowda, Co-founder and Executive Director, added, "This investment enables us to scale new heights. With AI at our core, we will continue to create safer, more efficient, and environmentally responsible commuting solutions." Fullerton Fund Management's Huck Khim Tan highlighted Routematic's role in decarbonisation and called it "a profitable, fast-growing business solving critical challenges in urban mobility." Shift4Good's Sebastien Guillaud praised the platform's real-time automation, saying it "sets a new benchmark in a traditionally low-tech sector." Routematic is poised to lead India's transition to green, tech-enabled urban mobility, addressing corporate ESG goals while redefining the future of employee commutes.
Time of India
07-05-2025
- Automotive
- Time of India
Routematic raises $40 million in funding round
NEW DELHI: Business-to-business ride services company Routematic has raised $40 million in a funding round led by venture capital firm Fullerton Carbon Action Fund and Shift4Good, senior company officials said on company plans to use the fund to strengthen its business matrix and expedite its journey towards public listing, Founder and CEO Sriram Kannan said."We have signed a shareholder agreement for a $40 million fundraise. The fund will come in two tranches," he provides an AI-based technology platform to manage the commute of employees. The company's platform optimizes service routes and enhances fleet efficiency by boarding employees of different corporations as per demand. Kannan said the company has services in 23 cities in company is planning to foray in overseas markets as well as expand deeper into top 5 cities -- Bangalore, Pune, Hyderabad, Chennai and Delhi NCR."We are looking to go towards an exit event, which is an IPO. This funding would help us get there much quicker than what we can do organically. The corporate transport market is going towards this managed services are helping corporates in optimizing their employees travel cost as well as eliminating several cost layers engaged in its management," he next phase focuses on establishing city-level command centers that will enable demand-responsive fleet management at co-founder and executive director, Kavitha Ramachandragowda said the company doesn't plan to own any assets but it will facilitate driver said Routematic has just started discussion to rope-in driver partners from electric vehicle-based beleaguered firm BluSmart but it is at a very initial about financials of the company, Ramachandragowda said "We expect to close the fiscal year 2024-25 with over 50 per cent growth at around Rs 180 crore." The company had posted revenue of around Rs 116 crore in 2023-24.
