In October, Prime Minister Narendra Modi highlighted the role of innovators from Tier 2 and Tier 3 cities in boosting the ecosystem, and also lauded the ability of startups to transcend state boundaries. One such innovator leveraging technology to solve Indian problems is Yamuna Nagar-based logistics tech startup TruckSuvidha.
After more than five years of bootstrapping, the company has now raised its seed funding round. Talking to Inc42, TruckSuvidha cofounder Ishu Bansal said that the company has raised an undisclosed seed round from Maharatna Gas Authority of India Limited (GAIL).
Bansal told us that the company will be using the funds to invest in technology backend and also invest towards entering more cities as part for the company’s expansion plans. Founded by Bansal and Amit Punaini, TruckSuvidha is a marketplace to connect transporters, truck drivers, customers and other related entities.
TruckSuvidha: Easing Access To Transportation
Customers can post and search for loads and trucks on the website and at the same time can track and receive requests for the same. The service can be utilised by transporters, truck drivers, packer and movers and even people who are looking for intercity or interstate shifting of their household goods.
Customers can select trucks based on their requirements. This helps logistics heads, transporters, delivery heads etc., manage the movement of the vehicle and material loads efficiently, at the same time allowing truck drivers to get return loads on the trip.
The company claims that it has over 332K trucks online with over 1500 daily visitors. It claims to have more than 34K registered transporters, with over 1550 bookings each day.
The users can subscribe to the platform for regular updates and the company also has a SaaS solution to help transporters manage their supply chain. It provides them bookings through their contractual bookings, which can help them save up to 5-15% in their costs.
However, TruckSuvidha monetises mostly through its additional services of GPS as well as FASTtag solutions. Bansal told us that the company has been breakeven since 2016, so the fresh funding wasn’t a need but an opportunity.
Trucksuvidha was incubated at Atal Incubation Centre- BIMTECH, an incubation centre setup under the Atal Innovation Mission, NITI Aayog. “AIC-BIMTECH has been associated with TruckSuvidha for almost a year now. We have seen them reach this stage, bootstrapped, only due to their passion towards the trucking community and strong work ethics,” said Dr Abha Rishi, CEO, Atal Incubation Centre-BIMTECH.
Logistics Industry In India
The Indian trucking industry is currently valued at $130 Bn and there are approximately 5.6 Mn on road vehicles transporting 80% of the country’s freight. But issues such as lack of drivers, inadequate data about transport in regions that are opening up, return loads, on-time deliveries and availability of transporters still dog many of the businesses involved in logistics.
The segment has been fragmented for the longest time, even though in the last few years, several tech startups have identified the need for disruption in the sector. In the context of the funding amount, the recorded growth rate between 2014 and 2018 for startups in the logistics sector is 226%, according to DataLabs By Inc42.
The market size of the Indian logistics sector shall hit $215 Bn by 2020, logging 10.5% CAGR, says IBEF. Logistics also generates millions of employment in the country. Currently, employing 22 Mn people, it is estimated to surge to 40 Mn by 2020.
At the same time, in the Union Budget 2019, the government allocated INR 100 Lakh Cr over the next five years to build and develop critical logistics and transport infrastructure. At present, draft national logistics policy is under works and is expected to bring down India’s expenditure on logistics to 9% of GDP from the existing 14%.
However, amid a slowdown, startups along with the conventional players might feel the heat in the short term. While steps like GST and demonetisation had negatively impacted the Indian logistics sector to some extent, the recent economic slowdown has also hampered the growth and eaten into the already relatively thin margins in logistics.