According to IBEF, the Indian logistics sector is expected to grow at a CAGR of 8%-10% from $160 billion to $215 billion by 2020. Benguluru-based BlackBuck is a logistics startup that is looking to modernize logistics and make it as simple as hailing an Uber.
Founded in 2015 by IIT-Kharagpur graduates Rajesh Yabaji, Chanakya Hridaya and Ramasubramaniam B, Blackbuck was started an intercity logistics company. Today, it uses technology to match a shipper with a trucker and enable price discovery. It has over 10,000 shippers, 2,50,000 trucks, and covers over 2,000 locations.
Trucks usually run empty on their way back from a drop. To tackle, this problem, BlackBuck has developed an app that enables truck drivers to accept work and navigate to a destination using Google Maps. It helps Indian truck drivers, who typically are not very literate, to find 25% to 30% more work opportunities.
On the client side, the app enables businesses to place shipping orders. It has also put together the infrastructure around trucking to facilitate payments, insurance, and financial services.
BlackBuck moves a wide variety of goods across India, with a strong emphasis on agricultural products, coal, oil, metals, chemicals, and Fast Moving Consumer Goods (FMCG). Its clients include companies like Tata Steel, Asian Paints, Coca-Cola, Marico, and Reliance Industries.
BlackBuck competes with the Rivigo, which is backed by SAIF Partners and Warburg Pincus. Other competitors are SoftBank-funded Delhivery in the trucking business vertical, Matrix Partners-backed Loadshare in the B2B sector, and AI-backed supply chain optimization startup Locus in the e-commerce and third-party logistics sector.
BlackBuck reported revenue of INR 902 crore ($135.5 million) and a loss of $17 million in fiscal year 2018. Revenue in fiscal year 2017 grew seven times to INR 566 Crore ($76.4 million) and losses grew over five times to $11.6 million. It aims to achieve profitability by December 2021.
Blackbuck has so far raised $285 million in funding from investors including Sequoia Capital India, Sands Capital Ventures, International Finance Corporation, Light Street Capital, Accel, Wellington Partners, B Capital Group, and Goldman Sachs. Its latest round was held last month when it raised $150 million at a valuation of an estimated $950 million.
The company plans to use the funds to on-board new trucking partners, expand to new transportation corridors, and invest in product and data sciences capabilities and other emerging technologies.
Rival Rivigo, with revenue of $101 million and loss of $34 million in 2018, has raised $216.2 million in funding at a valuation of $950 million. Rivigo uses its own fleet for its digital marketplace and claims to reduce delivery time by 50-70% for customers.
According to ASSOCHAM, India spends around 14.4% of its GDP on logistics and transportation as compared to less than 8% spent by the other developing countries. The tech-enabled logistics sector is a vital cog for e-commerce businesses and is in need of a complete overhaul. Just this year alone, the sector attracted $6.25 billion across just eight deals. It is great that it is able to attract funding to catalyze this much needed change.