The transportation sector has been at the heart of India’s economic activity. Since the beginning of the first plan in 1951, road freight traffic has grown annually by 9.1 per cent but the road network has grown annually by just about 4.2 per cent. This has put tremendous pressure on the existing road network leading to congestion, delays and eventually higher costs and lower profitability in the trucking business.
But if you look at the figures you will come to know that how potential trucking sector is. According to the figures, an Indian truck travels an average of 200-250 km per day, as compared to the global average of 400-500 km per day. Moreover, the average inventory days in an Indian warehouse are 33 days as compared to just 24 days in China. The logistics accounts for 13 per cent of total cost in India as compared to 6-7 per cent globally.
All these open up a huge opportunity for Indian transport and logistics sector in terms of cutting their costs, enhancing their efficiency and improving their return on investment.
And that is exactly where BlackBuck sees a good role for its platform in helping the logistics industry achieve scale, efficiency, and profitability.
Founded by Rajesh Yabaji, Chanakya Hridaya and Ramasubraminam B, Blackbuck is a comprehensive truck aggregator that is not only bringing down costs but also enhancing the logistics operations of companies. From a 96-point checklist for truck empanelment to transparent auction-based pricing to anytime tracking of freight, startup has several firsts to its credit and is well on its way to transforming the logistics function for companies.
Within one year of operations, the company has attracted funding from some of the biggies in the industry including – Tiger Global, Accel, DST Yuri Milner’s Founders Fund and Flipkart. The company has recently closed a funding of $25 million. The company has its presence in 220 locations and has customers like Unilever, Britannia, Godrej, Marico, Jyothy Laboratories, EID Parry, Asian Paints etc.
To find out more about the company and its journey, we interacted with Rajesh Yabaji, Co-founder of BlackBuck.
How did entrepreneurial bug bit you?
About Entrepreneurship, probably it was not too direct. I only knew one thing; I always wanted to build something really “BIG”. During my stint at ITC, freight was an area which took a high spread of costs and it was really difficult to execute any change in the way things were executed. The idea of building BlackBuck came across during this stint. I met Subbu and Chanakya (Co-Founders) with whom I shared similar passion for this industry and this is how BlackBuck was born.
How did you come up with the name ‘BlackBuck’?
BlackBuck is one of the fastest animals in the world. More importantly, this is found only in India. For us it signifies responsiveness and most importantly its cool!
Kindly throw some light on your business model.
BlackBuck is an online B2B marketplace for inter-city Full Truck Load (FTL) transportation. Startup brings truckers and customers on a platform to execute the transaction using intelligent auction engines equipped with smart mobile interfaces. Integration of technology with on-ground execution helps manage execution in the most effective manner.
You have bagged good amount of money from bunch of quality investors. So how are you planning to use these funds?
BlackBuck has raised a total of $ 30 million. Series B Investment of $25 million by Tiger Global and Apoletto, DST Global-Yuri Milner’s Founders Fund, Accel Partners and Flipkart in December 2015. Series A fund raise of $ 5 million by Accel and Flipkart in July, 2015.
We are planning to invest in building technology led products for this industry, which will bring out efficiencies for both customer and a transporter. Apart from products, we will use money to scale the business.
Who has been your mentor in your entrepreneurial journey?
Your first boss makes a huge impact on what you learn and what you aspire. Without my first boss, I would not have been in this position. He created a long lasting impact on what I could be and what I am. This man is Sanjiv Rangrass, Chief Executive of Leaf Business of ITC. After selecting me up from campus, he straight away gave me the responsibility of transforming his 100 year old Supply Chain. I got a lot of time to shadow him, learn from him and I implement lot of principles today that I learnt from him during the ITC days.
Some Business fundamental that you strongly believe in and would never want to change.
Technology penetration in logistics is at the lowest. BlackBuck has built technology, which integrates both demand and supply on to a single platform. Heavily fragmented nature of the industry along with the tech-enabled platform to solve this for us is the core of the business.
What kind of major challenges you faced in setting up your entity?
When we started the business, we had no support from both customers and supply partners since we were new in the market. This phase was critical as we had to establish ourselves and prove the value we were bringing to the table, both for our customers and supply partners. The perseverance and the BlackBuck Spirit demonstrated by the team lifted us from the ground and took our scale through the roof. I think it’s important that quality time and effort is spent on all problems. Every problem you solve helps you add value to the business.
Tell us about your future scale-up plans?
With respect to plans and vision, we want to see the world of transportation to be run using technology, completely. We believe this would be the best way to execute freight, which will lead to making us the largest freight company in the short term – As the market is very fragmented at the moment. In the long run, we want to look at possibilities of launching multiple business segments and also taking the story global.
Changes have you experienced in your own self since the day you started the business till now.
I believe that I am much more confident, have much higher conviction and improved decision-making capability.
The industry of freight contributes to 6 per cent of India’s GDP. The majority of this portion is inter-city logistics which is estimated to be a $100 billion market in India. The current players operating transportation are asset-lite and very fragmented. The suppliers to them again are completely fragmented with average ownership of 3 trucks per person. The commerce in this industry happens in a broken offline method. BlackBuck is re-creating logistics commerce using technology, building a platform where buyers and sellers of freight can engage seamlessly.