Deal focus: BlackBuck climbs the logistics ladder

Rajesh Yabaji had responsibility and power – what he was missing was influence. As supply chain head for the leaf tobacco business of Indian conglomerate ITC, he needed to rationalize and simplify the procurement process, but quickly realized the real problem lay with a highly fragmented intercity trucking industry. He had little leverage in this area.

“Every process was so basic and non-standardized that a team within a corporate entity could never have solved it,” Yajabi remembers. “It was clear to us that this had to be done by a different entity.”

Seeing opportunity in this logistical dysfunction, Yabaji joined fellow ITC alumnus Chanakya Hridaya and supply chain consultant Ramasubramaniam B. to launch trucking services marketplace BlackBuck in 2015. With a fresh $70 million in Series C funding and the help of new investors, the start-up hopes to reach new heights in the industry it is helping to create.

Rather than trying to impose order in India’s long-haul trucking business from the top down, BlackBuck aims to give truckers and customers the tools to self-organize. Similar to Uber, the 100,000 trucks on the platform use a mobile app to receive orders, with supply and demand setting prices rather than a central authority.

BlackBuck sees even greater opportunity in upcoming regulatory reforms expected to ease many of the struggles for third-party logistics providers. For instance, the recently approved goods and services tax will replace the country’s burdensome state and federal tariffs with a single point-of-sale payment. Companies with established networks like BlackBuck expect to benefit from the resulting surge in interest for trucking.

“The supply chain networks will become more business-efficient rather than tax-efficient, and optimized supply chain networks will increase demand for intercity long haul transportation,” Yabaji says. “For an organization doing business in this segment, this is definitely a plus point.”

BlackBuck’s innovative approach has gained it significant VC backing. Accel Partners and e-commerce giant Flipkart participated in the company’s first funding round and have re-upped in every round since then, including the most recent one. Yabaji says the two investors have been crucial to the company’s success, with Flipkart guiding management through the challenges of building an online business while Accel helped improve the internal organization.

The arrival of US-based PE firm Sands Capital, which led the Series C round, on BlackBuck’s investor roster has given the company fresh confidence to tackle a new set of challenges. 

“Accel’s help meant the company was actually moving from a venture organization into a more full-scale organization,” Yabaji explains. “This is a phase where we want to partner with firms like Sands Capital, which not only plays in the venture space but also on the growth equity side and in the public markets as well.” 

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• Topics
• South Asia
• Technology
• Expansion
• India
• Logistics
• Accel Partners
• Sands Capital
• Growth capital
• Venture