Will Flipkart’s $25m funding in BlackBuck fuel the logistics war with Snapdeal-GoJavas?

Photo credit: Mariusz Kluzniak

Bangalore based business-to-business (B2B) logistics startup BlackBuck has raised series B funding of US$25 million from Accel Partners, Flipkart, Tiger Global, and Apoletto Asia backed by Russian billionaire Yuri Milner.

Flipkart’s fresh investment in Zinka Logistics, the holding company of BlackBuck, comes just two months after its rival Snapdeal invested US$20 million in Gurgaon based GoJavas, an ecommerce logistics firm.

Flipkart’s investment in the company indicates plans of BlackBuck entering the express shipments space in India. Flipkart currently fulfills its logistics needs through its own company eKart logistics. Amazon also has its own logistics arm in India, Amazon Transportation Services.

India’s growing logistics market will grow at a compounded annual rate of 12 percent, reaching US$300 billion by 2020, according to a report by Novonous.

BlackBuck was founded in January by two IIT Kharagpur graduates and former employees at tobacco firm ITC – Rajesh Yabaji, 27, and Chanakya Hridaya, 26. The third cofounder – Rama Subramaniam, 42 – was a former executive at MieBach Consulting.

The company acts as a marketplace of truck owners and received US$5 million earlier this year in series A funding from Accel Partners and Flipkart. It facilitates full truck load buying and selling between providers and businesses.

The company has about 200 employees and serves the logistics needs of clients such as Asian Paints, Unilever, Britannia, Godrej, and Marico for their logistics needs.

With growing demand for transportation of goods between businesses and consumers, India has seen a slew of logistics startups come up in the last 3-4 years. Venture capital firms such as Saif Partners, Accel Partners, Sequoia Capital, and even Singapore Post have placed their bets on this sector.