BlackBuck Closes Series D Round At $150 Mn Led By Goldman Sachs, Accel

Bengaluru-headquartered logistics startup BlackBuck has announced that it has closed a $150 Mn Series D round. The equity round has been led by Goldman Sachs Investment Partners and Silicon Valley-based Accel.

The company also onboarded new investors such as Wellington, Sequoia Capital, B Capital and Light Street Capital. Existing investors which participated in the round include Sands Capital and International Finance Corporation, the investment arm of the World Bank.

With this round, the total funding of BlackBuck is more than $230 Mn. BlackBuck plans to use the funds to penetrate deeper into the market, by on boarding new trucking partners along the existing as well as new transportation corridors. It will also invest heavily in product and data sciences capabilities, to enable more efficient freight matching processes.

BlackBuck was founded in 2015 by Rajesh Yabaji, Chanakya Hridaya, and Rama Subramaniam. The company offers its services across more than 1,000 locations and also reaches and impacts over 2,000 villages in India. It has truck services listed on its platform and does an intelligent match for customers, based on their requirements.

ESOP As Part Of Series D Round

The company has announced that as part of Series D, the employees at BlackBuck have access to liquidating 25% of their total vested stocks, at the current stock price of the company.

This is the second time BlackBuck is executing a stock liquidation event for the employees of the company, the first one was in 2017. The company claims that over the last four years, the company’s employee stock option (ESOP) plan created a cumulative value of over $43 Mn for its employees.

Investor Speak

Sami Ahmad, head of Asia for Goldman Sachs Investment Partners Venture Capital and Growth Equity team said, “We believe that with its technology-enabled approach to logistics and associated services, Blackbuck is well positioned to better serve the needs of shippers, fleet owners, and truck drivers.”

Further, Sameer Gandhi, partner at Accel said that BlackBuck, through its asset light, marketplace model has already proven to be a game changer and has successfully solved legacy problems like fleet under-utilization and price opaqueness.

Kabir Narang, general partner and co-head of Asia at B Capital says that BlackBuck’s tech platform helps improve utilization of trucks, increases yield and improves service levels to shippers.

BlackBuck Leveraging Tech For Its 60K+ Fleet Owners

Rajesh Yabaji, CEO and cofounder of BlackBuck said, “With this round of financing, we will invest to deepen our presence across the national market. Significant investments will be made into product development and data sciences, both these dimensions are core to BlackBuck’s marketplace approach.”

The company uses technology to match a trucker with a shipper real-time, enabling transparency, higher truck utilization, better shipper services levels, and efficient pricing. It also facilitates services around trucking, by providing fleet cards, tyres, IoT, insurance and working capital credit to truckers.

the company claims that fleet owners on the BlackBuck platform have been able to reduce idle time by 45%. This has led to an increase in earnings between 20 and 30%.

Yabaji further claims that BlackBuck holds over 90% of online market share of trucking in the country. “While technology has helped us ensure a great shipping experience for our customers, being asset light has helped us experiment often and scale faster,” he added.

In FY18, the company reported a 59% jump in its revenue to $128.3 Mn (INR 902 Cr) with a loss of $16.6 Mn (INR 116.7 Cr), up 35% in the year. It is to be noted that BlackBuck earns about 15-20% commission for providing business to trucks it hires.

The company’s filings also showed that it aims to achieve profitability by December 2021. According to the Ministry of Corporate Affairs filings of BlackBuck’s parent company Zinka Logistics Solutions Pvt Ltd, accessed by Inc42, its pre-money valuation reached $1.11 Bn (INR 7,732 Cr) as on December 31, 2018.

Fragmented Logistics Market In India

According to Inc42’s State of The Indian Startup Ecosystem 2018 Report, India had over 900 logistics startups as of November 2018. Between 2014 and 2018, these startups have raised over $1.4 Bn funding across 115 deals.

Over the years, startups in this sector have come up with innovative new technologies with logistics-related software solutions, last-mile delivery, robotics, automation solutions. BlackBuck competes with the likes of Delhivery, e-Kart, Grab a Grub among others to dominate the sector poised to hit $215 Bn by 2020.

After the war in ecommerce, logistics has become the new battleground as it is a major enabler of the Indian ecommerce industry. With increasing number of unicorns in the sector, the fight for dominance has become harder and expensive with the need for rapid expansion to stay relevant.