BlackBuck’s out to raise $150 m in new round
Latest financing round may value trucking company at around $800-850 million.
According to regulatory filings, Goldman Sachs has invested about $30.7 million in Zinka Logistics Solutions, which operates Black-Buck. B Capital, a VC fund founded by Facebook cofounder Eduardo Saverin, has pumped in another $12.8 million. However, sources said infusion from Accel US, which is expected to lead the round, was yet to close.
BlackBuck competes with Rivigo and SoftBank-backed Delhivery in its trucking business vertical. These startups are competing in a market which is underdeveloped, highly fragmented and fraught with inefficiencies which can be potentially disrupted through technology adoption. Of the unorganised logistics market, trucking makes up the largest share, with 85% of them being small fleet owners with 5-20 trucks.
BlackBuck founder Rajesh Yabaji and Accel Partners did not respond to emails seeking comment.
In the ongoing round, the company in December last year mopped up $12.43 million from existing investors Sands Capital and International Finance Corporation, the investment arm of the World Bank. Earlier in October, it raised $27.4 million in convertible notes in a round led by Sequoia Capital India, along with existing investors Accel Partners and Sands Capital. The total infusion till date in this round comes to about $74.9 million, according to filings.
The company’s existing investors include Sands Capital, IFC, Accel Partners, Sequoia Capital, Tiger Global Management and DST Global, Miebach.
Founded in 2015 by IIT-Kharagpur alumni Yabaji and Chanakya Hridaya, Black-Buck uses technology to match a shipper with a trucker, address information mismatch and facilitate price discovery, thus driving efficiencies. It also facilitates infrastructure around trucking, including payments, insurance and financial services. Blackbuck’s revenue rose about 60% to Rs 901.9 crore in fiscal 2018. Its expenses for the year increased in an almost equal proportion, 56%, to Rs 1,018.61 crore.
In India, most activity has been in the long-haul freight marketplace segment with startups aiming to enable faster transactions, efficient spot pricing, standardised service levels and agent disintermediation. According to a report by Avendus Capital, while a conservative 2% commission rate assumption yields a $0.04 billion market opportunity today, it is likely to grow to $0.74 billion by 2020.