Technology for MSMEs: Online marketplace for small and midsized road transport businesses and individual commercial vehicle owners Vahak has raised investment from RTP Global with participation from Luxor Capital and Leo Capital. The pre-Series A round of $5 million also saw participation from angel investors including Kunal Shah, Founder and CEO, Cred; Jitendra Gupta, Founder and CEO Jupiter; Vidit Aatrey and Sanjeev Barnwal, Co-Founders, Meesho; Mohd Farid, Co-Founder, ShareChat; Amrish Rau, CEO, Pine Labs; Harsimarbir Singh, Co-Founder, Pristyn Care; Rohit Bansal and Kunal Bahl, Co-Founders, Snapdeal; and Ravish Naresh, Co-Founder and CEO, Khatabook.
“More than 2,00,000 transport SMEs have joined the platform so far and roughly about 75-80% per cent of them are small-scale companies. We saw a huge surge of user activity especially from the medium and small businesses and lorry owners before and after the pandemic. During the lockdowns we saw 30 per cent more small users than usual,” Karan Shaha, Co-founder and CEO, Vahak told Financial Express Online.
The capital will be deployed towards hiring and enhancing the company’s technological capabilities apart from expanding its customer base and network. The startup serves the market gap for freight and special goods transportation for different types of cargo wherein trucks remain idle at any given point of time due to operational inefficiencies caused by a lack of technology. Vahak said this causes monetary losses for truckers and the logistics sector on a daily basis. The platform enables transporters to optimize their vehicle utilization through online load booking.
Vahak’s operating model is akin to China’s digital freight platform Full Truck Alliance that was reportedly valued at $24 billion in its debut on the New York Stock Exchange last month. Vahak aggregates transport service operators from across India and doesn’t own or operate its own fleets. It uses an auction marketplace app which allows customers to directly connect with transporters and truck owners and book trucks, trailers, and loads on shared vehicles, etc. The marketplace also allows transporters to create an online brand for their business, generate leads by leveraging a pan-India network, and increase their revenue generation by enabling them to run their vehicles for most days in a month.
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“There are some very deep-rooted issues for transport SMEs and lorry owners in offline space. Manual and telephonic operational management, sales burden, and credit issues are the major challenges. We help these small companies leverage the technology and the huge network that we have created. Businesses are able to instantly increase their reach from 10-15 vendors to lakhs and are able to build trust and brand value for their business through verifications and profiling om Vahak,” added Shaha. The startup is looking to add over 1.5 million small businesses and lorry owners to its platform by end of this year.
“Vahak is offering a service that addresses a universal human need in the transport of goods, in one of the largest and fragmented logistics markets in the world. By building an asset and working capital-light auction-style marketplace, the team has displayed low operational intensity, ability to scale, and business quality we look for in category-defining companies,” said Yousif Al-Dujaili, Venture Partner, RTP Global. The company has developed a service provider network of truckers covering around 8,000 locations in India and already manages over 10,000 daily active loads. It is looking at reaching $1 billion annual GTV in the next 12 months from the current over $100 million annualized GTV run-rate.