Backed by Accel Partners, Tiger Global & other investors, Blackbuck’s vision is to reinvent the freight-booking logistics sector, with a focus on uplifting the truck driver in the process.
In December 2015, when the Economic Times reported that BlackBuck, a one-year old freight-booking service company, raised Rs. 155 crores in Series-B funding, it caught our attention at The Smart CEO. We were intrigued to find out how a company that was less than 12 months old managed to raise such a large round, that too in the logistics space. Our initial reaction was, maybe, the company was riding the e-commerce wave and it would play a vital role by offering the problematic logistical support that the e-commerce sector needed. We decided to dig deeper, only to find out that the company specialized in the intercity trucking space, and served some of India’s biggest brands including Britannia, Asian Paints, Marico, Unilever and Godrej Consumer. We decided to interview Rajesh Yabaji, co-founder and CEO, BlackBuck, to find out more.
The Bengaluru-based venture was started by Yabaji along with B. Ramasubramaniam and Chanakya Hridaya, both professionals who had hands on experience in the field of logistics. Yabaji was a supply chain manager at ITC Limited, and he understood, very clearly, the whole value chain of logistics – planning, warehousing and transportation.
“In large organizations, we could often control the planning and warehousing, but we could do very little to improve the transportation part from inside,” he says, explaining how he identified a need to improve customer experience in transportation logistics. In January 2015, he founded BlackBuck, with the mission of delivering superior customer experience in managing intercity transportation for large companies. In the process, he realized that it was crucial to improve the lives of truck drivers and the entire logistics ecosystem, if this superior customer experience had to be offered.
Finding able support
Once Yabaji quit ITC in 2014 he wanted to put together an experienced founding team. He roped in Hridaya, his colleague and friend from ITC and IIT Kharagpur. But that wasn’t enough. He was fortunate to run into Ramasubramaniam B, a logistics industry veteran who spent several years at supply chain advisory firm MieBach Consulting.
Together, they mapped the global logistics industry and realised that the problems plaguing third world countries such as India and China were the same. They decided to focus on the Indian market, with a clear goal of having global ambitions.
The idea was to build a technology platform to serve as a marketplace where companies could find truck operators. Additionally, the company would handhold the whole process, making it an assisted marketplace. The key differentiation was, it wasn’t just a place where companies and truck operators would meet; Instead, BlackBuck would take ownership of the transportation process.
With a solid business plan and experience to back them, the founders were able to get good amount of traction (in terms of customer acquisition) from some of India’s largest business houses. Blackbuck received Series-A funding in April 2015, to the tune of US$ 5 million, from Accel Partners and Flipkart. The company also received subsequent funding in December 2015 to the tune of US$ 25 million from Accel Partners, Tiger Global, Flipkart and partner’s fund of DST Global. This money will be used to ramp up expansion, build products and scale up the team.
“In large organizations, we could often control the planning and warehousing, but we could do very little to improve the transportation part from inside”
The company has built a team of 230 people of which 40 form the core and Blackbuck recruits only through word-of-mouth. “Earlier, I used to be involved in the hiring process. Now my core team does the hiring,” says Yabaji, reiterating the need for trust in one’s team for success. He also believes that since this is not just an industry solution but a movement to improve the socio-economic status of the stakeholders (truck owners and drivers), the company is particular about choosing only those who have a high level of commitment to this cause.
Since the founding idea is to revolutionise and change the dynamics of this industry, the company is comfortable with hiring professionals with no logistics experience. “We are trying to implement small, incremental changes such as introduce cashless transactions – which is unheard of in this industry,” points out Yabaji. As of today, sales and marketing comprises nearly 100 people, 25 to 30 people are in business development, CRM and operations and about 25 people handle technology.
Yabaji reiterates that technology plays a crucial part, especially in using data sciences for transportation management, human resources and many other processes.
Tying up two ends
Blackbuck is a technology platform that enables the customer to buy and operate freight. In a traditional market, once the freight is on its way, the customer has no information or control on the status of his freight. Transporters themselves cannot provide accurate data.
While GPS enabled freight management is not new, the Blackbuck platform not only enables remaining in touch with the asset (truck), but the transporter too can increase the number of trips based on real time information, thus improving the value on the asset. A dashboard is made available using sensors (Internet of things), monitoring truck health, position of the truck, status of freight and other such information in a seamless fashion. The customer also benefits from the control it gives him from the comfort of his office.
“Technology has evolved and so that is less of a challenge than orchestrating this entire link up of the value chain; that remains the bigger challenge,” says Yabaji. Initially, convincing owners and the customers alike was difficult but now as word-of-mouth spreads, this process is easing up. Big players such as Unilever and Asian Paints are on the company’s client list and that adds credibility to the platform. Introducing apps in four languages namely English, Hindi, Tamil and Telugu, has been another major breakthrough to keep the drivers and truck owners engaged. These are 2G enabled, given the poor connectivity in interior parts of the country, and 10 versions have been introduced to cater to the different segments. In addition to this, Blackbuck also contacts potential customers to expand its base.
Eyeing the future
Yabaji shares that Blackbuck has been growing its revenue between 40 per cent and 80 per cent month-on-month. The platform has 10,000 trucks, that are now serving several large companies. The goal is to scale as fast as possible to become the largest B2B transporter by providing value added services and sustained marketing efforts. From its presence in 40 locations, it will also expand pan-India, before eyeing markets abroad.
What defines Blackbuck is not only its aim to connect the buyers and sellers of freight. Yabaji and Blackbuck have a larger vision – of improving the life of the truck driver on the road. The second round of funding will be used to build physical infrastructure such as lounges and amenities that will make driving safe and comfortable. He believes, only then will the impact be truly meaningful. He wants Blackbuck’s logistics revolution to take care of the truck owner as well as the driver, improving profitability and quality of life.
He estimates the Indian logistics industry at US $70 billion. Technology adoption is his greatest challenge, but he is sure it is only a matter of time before that is overcome as Blackbuck engages in totality with the entire ecosystem addressing the different needs of each stakeholder. “This needs a managed marketplace and cannot be handled by sites that hope for transporters and customers to meet on their own,” he sums up.
Founders: Rajesh Yabaji, Chanakya Hridaya and B. Ramasubramaniam
Investors: Accel Partners, Flipkart, Tiger Global and partner’s fund of DST Global
Industry: Transportation Logistics
Revolutionising the transport industry
Freight transport forms the backbone of most industries; it involves transporting important cargo from the warehouse to the distribution channel. Yet, this is plagued by unprofessionalism, as many enter this segment more due to lack of choice than a passion. Rajesh Yabaji, while working in ITC, realised that he was able to effect improvements in planning and warehousing, but was unable to do anything with regard to transportation, which was in the hands of truck owners. Along with Chanakya Hridaya, he started Blackbuck, a freight management solution that addresses the needs of every stakeholder in the transporting industry, right from the customer to the truck owner to the driver. The company has received two rounds of funding and has 10,000 truck owners registered on its platform. Transparency and better governance has enabled it to bag large players as its clients. Moving forward, it also aims to improve the infrastructure along the driving routes of truck drivers to improve their quality of work-life.