Japan’s cloud-based logistics platform OpenLogi gets $1.9M for Asian expansion

OpenLogi website

See the original story in Japanese.

Various instant e-commerce platforms or consumer-to-consumer (C2C) trading platforms, which an individual can readily make use of, have been started up in recent years. This active situation can be recognized from the growth of players in this field such as Mercari, Base, and Store.jp.

As trading of “things” occurs, logistics become necessary. Others seem to be growing with this flow as well.

Tokyo-based OpenLogi, which provides an outsourced logistics platform, announced on Tuesday that it has fundraised 210 million yen (about $1.9 million) from IMJ Investment Partners (IMJ-IP), SMBC Venture Capital and Infinity Ventures LLP. Coinciding with the funding, partner of IMJ-IP Hiroshi Oka has been appointed as an outside director.

This fund will be spent for enhancing human resources. According to OpenLogi CEO Hidetsugu Ito, the firm plans to increase the number of members up to about 25 from the current 15 (including 9 engineers). Concurrently it promotes business development overseas such as in Southeast Asia, also in cooperation with IMJ-IP.

I covered OpenLogi for the first time just a year ago. Please check out the previous article about their “optimization of warehouses and logistics business.”

OpenLogi CEO Hidetsugu Ito  (Image credit: OpenLogi)

Ito explains that the firm has been focusing in particular on the optimization of its warehouse control system for a year. Since many of the contracted warehouses are located in the Tokorozawa area (suburban Tokyo), the firm moved its office to Ikebukuro (transit hub to the Tokorozawa are) and sometimes has a meeting with the developer team even at a warehouse.

Over the past year, the firm has tackled “improvement of efficiency of warehouse work.”

To ship and stock goods in warehouses via OpenLogi, users only have to ask transportation companies to carry them after member registration on the website. As a result, some of the users send out goods without care.

Ito explains:

For example, when a user sends three goods of A, B, and C, he / she inputs information about the goods to OpenLogi’s system in advance, but sometimes differences between the arrived goods and the inputted contents can be seen. Although we had handled these cases through confirmation with chat tools so far, we have enabled warehouse operators to communicate directly with users only by receiving photos taken with iPad.

As reported previously, each warehouse has a unique work method or style. To optimize all of them by considering it as one large warehouse virtually, standardization of warehouse work is needed.

Ito mentioned the difficulties in standardization:

The standardization of warehouse work was not easy. For example, one warehouse operator requires photos of goods, while another requires clothes to be folded. We classified requests from warehouse operators into patterns, and we advanced standardization in the system side.

Image credit: OpenLogi

The firm contracts with several warehouse bases as of now, acquiring one company each month. As for the charging system, conventional uniform charge was tuned to be variable according to the number of shipment or work quantity.

Most of players, intending to bring forth a new business phase by making conventional business move online, generally starts from optimization of the business practices or operation in that field by leveraging technologies, as seen in laundry or printing industry. OpenLogi seems to have completed that phase as well, and is entering to the expansion phase. We will continue to follow their future growth.

Translated by Taijiro Takeda
Edited by “Tex” Pomeroy