The current trucking system of India has a huge inefficiency problem that has left a major negative impact in its economy. BlackBuck, which is one of the few startups in the Indian logistics arena, is trying to overhaul this dilapidated trucking system. To meet that goal, the startup has just raised $150 million in its Series D round of funding. This would bolster the resources of the company and help to get nearer to its goal.
This new round of investment was led by the Goldman Sachs Investment Partners and the Accel Corporation and this has put the valuation of BlackBuck very close to the $1 billion mark, and this is according to a person who is close to the matter. B Capital, Wellington, LightStreet, Sequoia Capital, and existing investors World Bank’s investment arm International Finance Corporation and Sands Capital have also participated in this Series D round.
This business-to-business startup company was launched just four years ago. The startup connects different businesses with operators of freight and truck owners. BlackBuck has already raised nearly $230 million in equity financing and it has also managed to raise another $100 million in debt financing till date. This information was revealed to the media by Rajesh Yabaji, who is the CEO of BlackBuck.
Rajesh Yabaji has stated that the startup will use this fresh infusion of capital into its operation to expand further and improve its technology stack which enables owners of trucks to find more work, and thus it will manage to grow its fleet of driver partners. Currently, BlackBuck has more than 300,000 trucks in its network and it has also about 10,000 clients which include multinational companies such as Coca Cola, the global powerhouse for soft drinks, as well as Unilever which is a consumer goods giant, and Tata, which is another giant corporation in India.
BlackBuck has created an app that has simplified its features for Indian truck drivers who are not well educated, thus they find it hard to use modern technologies which may be too complicated for them. Blackbuck’s easily navigable platform means that using Google Maps to find the destination and accept work has become much easier for them. On the client end, businesses have the option to open up a similar app in order to place orders. Recently, the company has also tied up with insurance company named Acko to ensure all the trucks under its platform.
Currently, the system is set up in such a way that the truck drivers in India often struggle to find any work on their way back from a supply drop. Rajesh Yabaji has said that BlackBuck enables its truck drivers to find around 25% to 30% more work opportunities. The startup company takes around 15% to 20% in commission from the orders placed under its network and that’s how it makes money.
The current logistics market in India is valued at $160 billion. It has attracted some big-name VC funds from all over the world in recent years. Delhivery, which is a supply chain startup, has raised more than $670 million from SoftBank, and Tiger Global among other firms. Rivigo, which is a startup that rotates its drivers to improve efficiency, has also raised more than $215 million from SAIF Partners and Warburg Pincus.
This is a very capital-heavy business. BlackBuck already employs close to 2,000 people and generates around $135 million in revenue, but this came at a loss of $17 million for the fiscal year of 2018. Rajesh Yabaji states that the startup aims is currently aiming to capture market share by aggressively growing its business, so profitability is not a big concern for them, and is something that they will be looking at in future.