BlackBuck, an online marketplace for logistics transactions, has raised $27.3 Mn (INR 202 Cr), thereby marking the entrance of Sequoia Capital as an investor in the Bengaluru-based startup.
According to the Blackbuck ’s regulatory filing, Sequoia’s SCI Investment VI fund has infused over $13.5 Mn (INR 100 Cr), as per regulatory filings, while earlier backers such as Accel and Sands Capital put in the rest.
Blackbuck CEO Rajesh Yabaji and Sequoia did not comment on the funding.
BlackBuck, started in 2015, claims to be India’s largest trucking platform, has seen fast growth in the last two years, with revenue growing seven-fold in FY17 to $76.4 Mn (INR 566 Cr), though losses also grew more than five times to $11.6 Mn ( INR 86 Cr) something that is the bane of logistics companies. Blackbuck had also reached operational profitability in that financial year.
BlackBuck has built technology that integrates both demand and supply onto a single platform. At the click of a button, customers can track and analyse the shipments carried out on the platform. On the other hand, truckers across the country through a mobile application are able to see customers’ demands in real time.
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Sequoia India, which closed its sixth fund at a fund corpus of $695 Mn in August had signalled its intention to double down its investment in early and growth stage startups with sectors like technology, consumer and healthcare sectors across India and Southeast Asia (SEA) playing the leading role.
“Macroeconomic factors like GST and their downstream effect into the logistics industry would affect the ecosystem in FY18 and the startup expects to be in a strong position to take advantage of the same,” Zinka Logistics, the name under which the startup is registered with the MCA had said in its FY17 filing.
In January, Rivigo Services, a competitor to BlackBuck raised INR 322.5 crore ($50 Mn) in a Series D round, which brought it close to a unicorn status.
While the opportunities are abundant for logistics companies, challenges remain as the logistics market in India, according to Ken Research, is largely unorganised with several local or domestic transporters with a fleet size of around five trucks or trailers accounting for more than two-thirds of the total owned and available fleet size for road transport in India.
In 2018, India was ranked 44th in The World Bank LPI Index that ranks countries based on their logistics performance — down from 35 in 2014. How much of the above ranking takes into account the disruptions associated with the implementation of the GST is not clear.
At the same time, NITI Ayog targets to reduce the logistics cost in India from the present 14% of GDP to less than 10% of it, by 2022.
While GST has simplified the operation aspects of logistics, the aspirational aspect of a bright future has been bolstered by the rise of India’s e-commerce market which is expected to be worth more than $2 Tn by 2034, second only to China.
Indian logistics companies can expect more sunny days on the road ahead.