Exclusive: Logistics startup BlackBuck to raise new round led by Goldman Sachs

Zinka Logistics Solutions Pvt. Ltd, which operates business-to-business tech-enabled logistics startup BlackBuck, is raising Rs 303.31 crore ($43.53 million at current exchange rates) in a fresh funding round led by new investor Goldman Sachs.

B Capital, the venture capital firm of Facebook co-founder Eduardo Saverin, is also coming on board as a new investor in this round, the firm’s filings with the Registrar of Companies show. While Goldman Sachs will contribute Rs 214.10 crore ($30.73 million), B Capital will account for the rest, the filings stated.

According to TechCircle estimates, the current round will see BlackBuck’s valuation soar to nearly six-fold to Rs 6,000-6,130 crore ($860.70-879.34 million), bringing it closer to unicorn status.

In its last known funding round in December last year, it had raised Rs 87.02 crore ($12.43 million then) from existing investors Sands Capital and the International Finance Corporation, the World Bank’s investment arm. It was valued at $202-207 million (Rs 1,413.47-1,448.46 crore) in that round, as per TechCircle estimates.

BlackBuck has been raising capital in multiple tranches at regular intervals since October last year.

In October 2018, it raised Rs 202.96 crore ($27.4 million then) in a round led by new investor Sequoia Capital India with participation from existing investors Accel Partners and Sands Capital.

Cumulatively, BlackBuck has raised $83.36 million since October last year.

It is not clear whether the latest funds infusion is part of a larger ongoing fundraising exercise. Media reports in the past have mentioned that the logistics company is raising anywhere between $150-200 million from potential investors that could also include SoftBank and Naspers.

E-mail queries sent to Blackbuck seeking more information on this round did not elicit a response at the time of filing this report.

Blackbuck

The venture was founded in 2015 by IIT-Kharagpur alumni Rajesh Yabaji, Chanakya Hridaya and Ramasubramaniam B. The company provides B2B logistics solutions for long-haul trucking. It brings together shippers and truckers through its online marketplace to facilitate inter-city freight transportation.

Blackbuck, which is currently present in over 1,000 locations across the country, has more than 200,000 trucks and over 8,500 shippers on its network.

The firm counts Asian Paints, Unilever, Coke, Britannia, Godrej, Marico, Jyothy Laboratories and EID Parry among its clients.

The four-year-old venture is among the most well-funded startups in the logistics-tech space. In October last, the company also announced that it will set up an independent fin-tech firm to deliver financial services to the trucking industry.

For the financial year 2017-18, Blackbuck saw its operating revenue rise by nearly 58% even as losses widened on account of higher expenses.

Operating revenue grew to Rs 888.76 crore, up from Rs 563.55 crore in the previous year. The company’s operating revenues are based on services related to inter-city long haul logistics.

Net losses widened to Rs 1,16.71 crore, up from Rs 86.51 crore in the previous year.

The company’s gross expenses grew 55% to Rs 1,018.61 crore, up from Rs 653.34 crore the previous year. The rise in expenses was attributed to a significant increase in ‘other expenses’, which stood at Rs 940.18 crore. This included transportation costs which were Rs 880.03 crore, accounting for almost 93% of other expenses. In 2017, other expenses accounted for a large share of the total expenses at Rs 606.84 crore.

E-mail queries sent to Blackbuck seeking comments on its latest financial performance did not elicit a response at the time of publishing this report.

Deals in the space

The logistics segment in India has seen increased deal activity over the past few months.

Earlier this month, Gurugram-based logistics-tech firm Delhivery Pvt. Ltd became the newest member of India’s unicorn club after raising $395 million (around Rs 2,784 crore then) in a Series F funding round led by Japanese conglomerate SoftBank.

In February this year, logistics-technology firm Rivigo raised $35.6 million in a fresh round of funding from existing investors Warburg Pincus and SAIF Partners. TechCircle estimates show that Rivigo raised the fresh capital at a valuation of $947.8 million, just short of the coveted unicorn status.

Around the same time, VCCircle reported that Diptab Ventures Pvt. Ltd, which operates tech-enabled logistics marketplace for intra-city deliveries LetsTransport, was raising $15 million in multiple tranches. It had already secured $2 million in the first tranche from Japan-based Mitsui Sumitomo Insurance Capital Co. Ltd, CBC Co. Ltd, Flex Inc., and Singapore-based KC Investments.