Logistics tech startup Vahak announced that it has raised $5 Mn pre-series A funding led by RTP Global with participation from Luxor Capital and Leo Capital.
The other marquee angel investors included Kunal Shah, founder and CEO, CRED; Jitendra Gupta, founder and CEO Jupiter; Vidit Aatrey and Sanjeev Barnwal, cofounders, Meesho; Mohd Farid, cofounder, Sharechat; Amrish Rau, CEO, Pine Labs, Harsimarbir Singh, cofounder, Pristyn Care; Rohit and Kunal Bahl, cofounders, Snapdeal and Ravish Naresh, cofounder and CEO, Khatabook.
The company was cofounded by IIT graduates, Karan Shaha and Vikas Chandrawat in February 2019. The funding will be used to strengthen Vahak’s team and technological capabilities, and expand its customer and network base. Millions of trucks, in India, remain idle at any given point of time due to operational inefficiencies leading to monetary losses for logistics businesses. Vahak’s solution helps transporters optimise their vehicle utilisation through online load booking.
“We are delighted to receive this funding from an esteemed group of marquee investors. At Vahak, we are leveraging technology to enable the stakeholders in the transport sector to connect with each other and bring growth. We started out with the vision of addressing the huge trust gap in the logistics space and simplifying things for transporters, agents, and vehicle owners. Going forward, we are looking to strengthen our pan-India presence,” said Karan Shaha, cofounder and CEO, Vahak.
Bengaluru-based Vahak’s aggregates transport service operators from all over India and connects to more than half a million trucks across the country. It uses an auction marketplace app which allows customers to directly connect with trusted transporters and truck owners across India and book trucks, trailers, and loads on shared vehicles etc. The marketplace also helps transporters to create an online brand for their business, generate leads by leveraging a pan-India network, and increase their revenue generation by enabling them to run their vehicles for most days in a month.
“Vahak is offering a service that addresses a universal human need in the transport of goods, in one of the largest and fragmented logistics markets in the world. By building an asset and working capital light auction-style marketplace, the team has displayed low operational intensity, ability to scale and business quality we look for in category defining companies. We’re excited by Vahak’s potential to become a mission-critical logistics player in India,” said Yousif Al-Dujaili, venture partner at RTP Global.
Vahak has developed a service provider network of truckers covering around 8,000 locations across the country. The platform already manages more than 10,000 daily active loads and the network now covers major transport and logistics hubs across India and is aiming at reaching $1 Bn annual gross transaction value (GTV) in the next 12 months. Vahak’s claims to have grown 10X in the past year to over $100 Mn annualized GTV run-rate on only $800,000 raised. It had raised about $3 Mn in seed funding in June 2020.
The Indian Logistics Tech Opportunity
At present, the logistics market is crowded with a lot of existing players and startups. Some of the players that are operating in this space include Cogoport, Rivigo, Shipsy, Shiprocket, Kale Logistics, IPO-bound Delhivery, Blackbuck, Freightwalla among others. The logistics tech sector has produced two unicorns — Delhivery and Rivigo — as the rise of ecommerce, distribution for online platforms and hyperlocal deliveries have got the innovation and investments flowing in the sector. Most of these have raised fresh funding within this year.
The Indian government has recognised the need for stronger technology-led interventions for the increasingly critical logistics sector in the Economic Survey 2020-21. The survey proposes solutions for real-time monitoring of logistics infrastructure by integrating various existing solutions through blockchain.
The government is developing a logistics planning and performance monitoring tool (LPPT) for real-time monitoring of operational performance and logistics infrastructure utilisation, as well as the India Logistics (iLOG) platform to bridge the gaps between the various tech solutions used across the national logistics value chain.