Information on the Target

The target of the investment is Zevo, a comprehensive supply chain and cold storage platform that has recently received funding from Agility Ventures. Zevo is renowned for its commitment to sustainability, utilizing innovative electric vehicles and end-to-end supply chain solutions. This positions it strategically within Vietnam's rapidly growing e-commerce sector, particularly in the last mile delivery segment, which faces various challenges but also significant opportunities.

Last mile delivery (LMD) is crucial in shaping customer impressions and optimizing operational efficiencies in logistics. It accounts for an estimated 28% of total shipping costs in Vietnam, rising steeply to 53% for on-demand deliveries. As online shopping burgeons, understanding and enhancing last mile logistics is essential for companies to meet consumer demands swiftly and efficiently.

Industry Overview in Vietnam

The e-commerce industry in Vietnam has witnessed explosive growth, with projections indicating that it may surpass other Southeast Asian countries such as Singapore and Indonesia. The market value reached approximately $13 billion in 2021, reflecting a $5 billion increase compared to the previous year, accounting for over 60% of the country's internet economy. Factors propelling this growth include a young, tech-savvy population, high internet penetration, and rising incomes, bolstered by government policies promoting digital economic expansion.

However, the industry's scalability is challenged by infrastructure limitations. Urban congestion and narrow roads create formidable barriers to timely deliveries, complicating logistics commitments for service providers. Furthermore, the relatively homogeneous transportation modes in Vietnam exacerbate these challenges, with restricted load capacities and higher costs per delivery.

The competitive landscape is another significant hurdle, with major players in the e-commerce and delivery space continuously investing in improving last mile services. Noteworthy collaborations like that between Grab and Vietjet Air exemplify the industry's focus on reducing delivery times, as platforms like Tiki and Shopee strive to enhance their speed metrics, aiming for delivery windows as short as one hour.

User behavior, particularly the prevalence of cash-on-delivery transactions, introduces additional complexities. Consumers' tendencies to reject deliveries for arbitrary reasons lead to significant losses, further stressing the logistical framework. This behavioral pattern requires innovative solutions to improve delivery success rates and operational efficiencies.

The Rationale Behind the Deal

The investment in Zevo by Agility Ventures is driven by the necessity to explore sustainable solutions in last mile logistics amidst growing e-commerce demands. The partnership aims to leverage Zevo's electric vehicle applications and innovative supply chain practices, addressing pressing environmental concerns and the urgency for efficient delivery systems in a crowded market. With sustainability becoming a focal point in logistics, the collaboration aligns with emerging trends that prioritize eco-friendly practices within the industry.

Information About the Investor

Agility Ventures is focused on making strategic investments in sustainable logistics and supply chain innovations. With a strong commitment to fostering environmentally-friendly solutions, the firm supports enterprises that align with its vision for a sustainable future in logistics. The investment in Zevo underscores Agility Ventures’ strategy to back companies that provide not only economic returns but also contribute positively to environmental sustainability.

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This investment appears to be strategic and timely, considering the ongoing transition towards sustainable delivery solutions in Vietnam. By placing resources in Zevo, Agility Ventures capitalizes on the burgeoning e-commerce market and addresses the critical challenges of last mile delivery through innovative approaches. The environmental implications also resonate with increasingly eco-conscious consumers, possibly gaining traction in market acceptance.

The emphasis on electric vehicles and sustainable practices positions Zevo favorably against competitors that may lag in adopting such technologies. Given the projected growth of the e-commerce sector and its logistical complexities, this investment can lead to significant market share and profitability for both Agility Ventures and Zevo, especially if they can effectively navigate the operational hurdles present in the current landscape.

In conclusion, Agility Ventures’ investment in Zevo could prove advantageous, provided they leverage the right technology and maintain focus on sustainability amidst growing competition. Additionally, the success of this venture may hinge on Zevo's ability to adapt to and streamline last mile delivery setups while fostering user trust and satisfaction in the e-commerce ecosystem, which remains pivotal for success.

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