Blackbuck gets Rs167 crore in Series B round
Blackbuck says the funds will be invested in developing a robust technology infrastructure and building the team
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Bengaluru: Zinka Logistics Solutions Pvt. Ltd, which owns the online freight services aggregator BlackBuck, has raised Rs.167 crore ($25 million) in a Series B funding round from Tiger Global Management Llc, Russian billionaire Yuri Milner’s personal investment firm Apoletto, Accel Partners and Flipkart. The company had raised $5 million from Accel Partners and Flipkart in June.
The funds will be invested in developing a robust technology infrastructure and building the team, said co-founder Rajesh Yabaji. BlackBuck was founded by Yabaji and Chanakya Hridaya, graduates of Indian Institute of Technology(IIT), Kharagpur, and former ITC Ltd executives.
The company acts as a marketplace connecting potential customers, who are essentially businesses, with trucks for inter-city transport of goods. The firm, which covers 40 locations across India and employs 200 people, plans to expand to at least 200 locations in the next one year. Its customers include Asian Paints Ltd, Britannia Industries Ltd, Godrej and Marico Ltd.
“A large part of the truck ecosystem is inter-city and driven by business-to-business commerce. We are a marketplace for inter-city trucking and provide customers with full truckloads. Our customers are large as well as small and medium businesses, but the focus is majorly on large companies,” said Yabaji. The firm is also looking to acquire technology firms focused on the logistics segment, he added.
At a time when investors are turning more cautious, the fund raise by BlackBuck is the biggest by homegrown logistics start-up and one of the bigger rounds secured by an online freight aggregator globally.
According to data provided by Tracxn, a company which provides data on start-ups, several successful businesses in the intercity freight segment have emerged in the US and China.
Loji and Fuyokache are two well-funded start-ups in Chennai, which raised $129 million and $10.4 million respectively from investors. Companies such as Trucker Path, Cargomatic and Transfix in the US have together mopped up about $46.5 million in institutional funding.
According to Tracxn, there are about 58 start-ups in this segment in India. The only firm other than BlackBuck to have raised significant funds is Rivigo, which raised $10 million from SAIF Partners in May.
Some of the other investor-backed start-ups in this segment in India include Shippr, The Porter, Blowhorn and ReturnTrucks, but none of them operate in the inter-city segment.
According to industry experts, though the domestic road freight industry is a $40-50 billion segment, it is fraught with challenges especially since the market dynamics vary according to locations and may impact consolidation of load. Besides, there are multiple stakeholders, such as truck owners, brokers, logistics companies and customers.
“First they have to figure out whether they are trying to solve problems around broking, pricing or quality of freight and build a business model focused on that. Customers are very demanding and they have a plethora of choices,” said Manish Saigal, managing director at consulting firm Alvarez and Marsal. “The next big challenge is broker. If you create a master broker or aggregator, could there be a backlash? Will you be able to replicate the services that they used to provide truck owners?”
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