India’s BlackBuck Valued at $1 Billion in $67 Million Fundraising

India’s trucking system has a major inefficiency problem that continues to drag the economy. BlackBuck, one of the few startups digitizing freight and logistics across India, has just achieved unicorn status after raising new funds.

Tribe Capital, IFC Emerging Asia Fund and VEF led the $67 million Series E funding round in the six-year-old startup, valued at $1.02 billion (from approximately $850 million in 2019 Series D round), BlackBuck chief executive Rajesh Yabaji told TechCrunch in an interview earlier this week. BlackBuck is the 16th Indian startup to become a unicorn this year.

BlackBuck connects companies with truck owners and freight forwarders. The startup has developed a simplified app for truck drivers in India, who are typically not very literate, to help them accept work and easily navigate to their destination using Google Maps. On the customer side, companies can launch a similar app to place orders.

About 700,000 truck drivers and 1.2 million trucks in India are currently connected to the platform, which processes more than 15 million transactions every month. “The truck drivers in India didn’t really go digital until 2019. Since then, the supply activity has grown 20 times,” says Yabaji.

“When we started BlackBuck in 2015, only 40% of truck owners had smartphones and for truck drivers, that adoption was only 7%. In 2019, 100% of truck owners and 70% of truck drivers had smartphones,” he said. this growth to the advent of low-cost Android smartphones and access to much more affordable mobile data (thanks to Jio Platforms).

“In addition, the government started to encourage digital adoption. There is now a digital toll system and many state governments have mandated GPS,” he said.

BlackBuck has also undergone significant transformation during this period. The platform no longer relies on call centers for booking orders to an app-based system. Today, Yabaji said the startup has reduced its reliance on brokers, who help them connect with truck drivers in smaller regions, as more truck drivers and fleet owners now have smartphones and book directly.

“On the supply side, the platform was built in such a way that it was indifferent to who ordered it. Anyone who has access to capacity at a particular location and at a particular time has access to the load. Basically we were okay with it from day 1 he explained. “Right now, 95% of cargo is accepted by small fleet owners who own two to three trucks.”

For BlackBuck, there was another challenge to penetrate the small and medium-sized business. The platform’s largest customer base traditionally consists of large enterprises. Yabaji said things have changed dramatically as the biggest growth BlackBuck has seen in recent years has come from SMBs. In total, the startup now has more than 10,000 SMB and corporate clients, including giants like Hindustan Unilever, Reliance, Coca Cola, Asian Paints, Tata, Vedanta, L&T and Jindal.

One of BlackBuck’s biggest successes in recent years has been the growth of the FASTag offering. (FASTag is an electronic toll collection system in India to make toll payments directly from the associated prepaid or savings account or directly to the toll owner.) Yabaji said 35% of India’s truck toll collection today is done through BlackBuck.

“We are the leaders in this category and have built several unique solutions for Indian truck drivers,” he said.

“India’s supply chain and logistics industry is moving from paper and pencil to digital,” Arjun Sethi, co-founder and partner at Tribe Capital, said in a statement. “BlackBuck’s ability to measure output and productivity growth has streamlined logistics challenges for the industry in a short space of time. The continued rapid growth promises to drive even greater transformation in the Indian truck ecosystem.” (As an aside, Tribe Capital is in talks to back at least two more Indian startups, according to those in the know.)

BlackBuck will leverage the new funds to deepen its presence across India and launch several new features in its marketplace, Yabaji said. BlackBuck is also present in Europe. Yabaji said the startup’s international game is still in its pilot phase and the major focus currently remains on India.

“Amid the Covid pandemic, Blackbuck has rapidly scaled its online freight market and fleet management services. Blackbuck’s contribution to greater transparency and efficiency in India’s large, fragmented and predominantly disorganized long-haul freight market offers the potential for significant development impact,” said Saadia Khairi , fund head at IFC Emerging Asia Fund, in a statement.

The new investment comes at a time when Indian startups are raising record capital and a handful of mature companies are beginning to explore the public markets. BlackBuck is the 16th Indian startup to become a unicorn this year, compared to 11 last year and six in 2019.