BlackBuck bounces back from Covid, reimagines its trucking business model

The Tiger Global and Sequoia-backed unicorn plans to deepen its reach from 100,000 villages currently to over 300,000 villages, and scale its existing businesses 3x by 2023

The Covid period of 2020 posed one of the biggest leadership tests for BlackBuck chief executive officer Rajesh Yabaji, who co-founded the trucking unicorn along with his junior at college—Chanakya Hridaya—and Ramasubramanian B, in 2015. 

After gaining recognition as India’s largest trucking platform and counting organisations such as Reliance, Amul and Tata Steel among its top customers, BlackBuck’s business model found itself severely disrupted by the coronavirus pandemic. In FY21, Bengaluru-based BlackBuck's revenue dipped by 61 per cent. The firm had posted an operating revenue of Rs 866.73 crore in FY21 from a pre-Covid high of Rs 2,235.7 crore in FY20.

But Yabaji and his team have been able to pull BlackBuck out of the pandemic. The firm is once again growing rapidly after Covid-19 headwinds in the trucking industry pushed it to reimagine the business model and emerge as an ecosystem platform for trucking. The company has diversified beyond the enterprise freight business since 2020 and is emerging as an end-to-end ecosystem player for truckers. There are now over one million transacting users on the platform, which is a 5x growth over the past 2 years. This diversification across a range of verticals has led to the digitisation of truckers. Today the company said that BlackBuck is the most widely used app among the trucking fraternity and has a presence across 100,000 villages in India.

“Despite the challenges that Covid threw at us, we adapted and grew on the back of a solid team,” said Rajesh Yabaji, co-founder and CEO of BlackBuck. “Our mission is to solve every need of a trucker; empowering him to manage and grow his business. We have scaled to one million transacting users on our platform and 80 per cent of this growth has come in the last two years.”

BlackBuck has been steadily growing in the last two years, reimagining its business, improving its product offering and launching new business lines. The firm said the aim is to be a trusted partner to every truck operator in India, enabling him to manage and grow his business. The platform provides a range of services from loads, payments, and telematics to financing. 

In the context of loads, BlackBuck has expanded beyond enterprise freight and now caters to SMEs (small and medium enterprises), transporters, and brokers for their trucking needs. On a daily basis, 9-10 per cent of India’s loads are posted on the platform, which is about $12 billion in annualized freight movement. 

BlackBuck’s payment solutions are aimed at helping a trucker manage his cash flows better, save money and provide the convenience of transacting digitally. Today, 1 in 3 truck operators in India use the payment service from BlackBuck.

Its telematics services enable the fleet operators to real-time monitor their entire fleet of vehicles, driver management and fuel monitoring. BlackBuck’s GPS ( global positioning system) processes 3 billion real-time locations and this data is used to communicate with the fleet operators constantly, offering him intelligence of the truck movement. Currently, BlackBuck said it has a 20 per cent market share in the telematics industry. 

Also, financial services is the newly launched vertical at BlackBuck and will help a fleet operator with working capital needs to manage his business.

“Going ahead, we will launch newer services, deepen our presence, servicing every village where truckers are present,” said Yabaji, an IIT-Kharagpur alumnus who wants to build the world’s largest trucking network.

BlackBuck plans to deepen its reach from over 100,000 villages to more than 300,000 villages and thereby scale 3x in existing businesses by 2023. It would also be launching new service offerings in the area of financial services and other frequent purchase categories in trucking. The firm would also scale up engineering and data science capabilities. As a result to the firm plans to double its headcount and hire over 8000 people over the course of the next 12 months.

What is helping it fuel this expansion are the funds that the firm has raised. Last July, it closed a $67 million round of equity financing, led by Tribe Capital, IFC Emerging Asia Fund and VEF. Existing investors Wellington Management, Sands Capital, and International Finance Corporation also participated in the round. The investment made the company a ‘unicorn,’ or a startup valued at more than $1 billion. The firm has raised $359 million in all from investors such as Tiger Global, Sequoia and Goldman Sachs, according to data platform Tracxn.

The company is going after a huge market. In financial year 2021, the size of the Indian logistics market was about $250 billion, according to the data platform Statista. It was estimated that this market would grow to $380 billion in 2025, at a CAGR of 10-12 per cent.

The Indian logistics sector provides a livelihood to more than 22 million people. Improving the sector will facilitate a 10 per cent decrease in indirect logistics costs, leading to a growth of 5 to 8 per cent in exports, according to the experts. In India, trucks have an average utilisation of just 33 per cent, with most of them standing without load or travelling empty or partially loaded. 

In contrast, a BlackBuck driver is given load assurance across multiple lanes and commodities to improve efficiency. For example, the driver is provided Maps with trucking context which helps him take the most optimal route and tells him about all fuel stations, toll gates and rest areas on the way.

BlackBuck’s onboard tracking devices, including global positioning system (GPS) units, constantly feed data to the backend system which predicts when a driver will finish unloading and recommends a load nearby even before he finishes unloading. This consistent demand mapping has optimised the running of trucks and led to higher earnings for drivers.

The telematics system, powered by big data and analytics, helps match the trucker with a shipper in real-time, enabling higher truck utilisation, better shipper service, and efficient pricing. BlackBuck also facilitates services around trucking by providing fleet cards, tyres, insurance and working capital credit to truckers. Another major concern of fleet owners is road mishaps. BlackBuck addresses this with its onboard “dashcam”, which continuously monitors a driver.