Trucking has been a huge challenge for businesses across the country as it remains largely unorganised for the last 50 years. The top 10 companies in the industry have less than 1% market share of the industry, which suffers heavily from cost inefficiencies and information asymmetry leading to a frustrating experience for all stakeholders.
According to several industry estimates, the cost of logistics in India is 14% of GDP compared to 8% in developed nations. To minimise trucking cost and make it efficient, Mumbai-based Truckola leverages technology to make transportation hassle-free and cost-efficient. It solves three pain-points primarily:
a) Reducing costs: Making the transportation process more transparent, data-driven and efficient to bring costs down.
b) Removing frustration: Use technology to make the information flow proactive, reliable and transparent to remove anxiety and stress of safe/timely dispatches.
c) Helping smaller fleet operators scale: It provides fleet operators with technology resources to reduce operation costs as they grow larger and hence help them scale their businesses profitably.
Team behind TruckOla
Floated in October 2015 by Raghav Himatsingka, Keshav Himatsingka and Vipul Garg, the company claims to have come a long way since then. “We launched the company with an investment of Rs 20 lakh in October 2015 and within six months we were doing business of Rs 13 crore,” says Raghav.
Raghav and Keshav hail from a family that has been in the transportation business for the last 99 years. They have collectively worked nearly 12 years in the trucking industry and deeply understand the pains of customers as well as vendors.
Raghav is a graduate from Stanford University & Georgia Tech where he studied supply chain engineering. Keshav is a computer science graduate from Duke University, while Vipul is an IIT-Delhi alumnus and was previously associated with Housing.com where he was part of the core technology team.
How is TruckOla different from Rivigo, BlackBuck?
Rivigo is a completely different business model because it owns trucks. The challenges, value proposition, operating model, profitability and scalability of their business are completely different from TruckOla.
“Blackbuck’s model is similar to ours in that we are both asset-free. However, we have core fundamental differences in our customer-vendor strategies, operating model as well as our technological capabilities to address the same problem,” explains Raghav.
He stresses that the company has a laser focus on creating a solid competitive advantage that is driven by technology instead of cash burn. “I think we have been highly successful in that thus far, especially given how much smaller we are compared to Blackbuck at this stage,” adds Raghav.
Clientele base, revenue and challenges
Currently, TruckOla is serving 100-plus customers across various industries, including textile, metals, agro, plastics, furniture, chemical, steel, cement, et al from 35 different locations in the country.
The company claims that it’s on track to earn Rs 75 crore in revenue this financial year. Importantly, TruckOla is anticipating almost 6X growth (it got Rs 13 crore revenue in the last fiscal).
TruckOla also claims to be breaking even soon. So far, it has amassed about 50,000 truckers registered on its platform across 20 states in the country.
The payment cycle is the biggest challenge in the trucking industry, thus it makes things difficult for new startups. “The payment cycle is typically around 60 days, but we were able to keep a negative payment cycle (we were collecting payments in advance) to maintain a healthy growth rate,” reveals Raghav.
An overview on trucking space and competitive landscape
During 2015, there were literally 100-plus companies that had suddenly come up in the space, buoyed by the funding rush of that year along with success of the aggregator model in the taxi space.
However, transportation is an extremely challenging and complex industry where it is difficult for a new entrant to make inroads. Almost all of these companies have now shut shop, or are burning loads of cash if they were lucky to get funded in the mad funding rush of 2015.
TruckOla appears to be among the few tech-driven transportation companies whose founders are both engineers as well as transport professionals.
It has demonstrated the importance of having that experience by not only growth, but also having solid financial fundamentals, unlike the majority of the startups in the trucking space. TruckOla competes with Blackbuck and Rivigo, among several others.