The transportation industry in India is highly fragmented and unorganized. 74% of all vehicle owners in the country own just a single vehicle. There are very few large fleet operators in the intercity cargo transportation sector with the largest operator owning only about a couple of thousand vehicles. Moreover, the intercity cargo transportation market is the largest, most challenging and most unorganized sector of the transportation industry. The biggest issue in this market is information asymmetry.
Founding Fathers
Raghav Himatsingka and Keshav Himatsingka have been associated with the transportation industry for about a decade. Both realized that transporters get the least amount of respect for the amount of hard work that they put in. There are 2 reasons for this: first, there is a serious lack of data and then there is a huge amount of cash transactions that happen in transportation business (to buy diesel, pay toll taxes, etc.). Because of this, there is a tendency in our community to distrust the words of drivers, managers, etc. and to oversee their cash management with suspicion. It is no coincidence that given a choice very few people want to join this industry today. In fact, the government of India also recognizes transportation only as a ‘sector’ and not as an ‘industry’ even though it contributes to about 6% of the GDP!
Raghav and Keshav are inspired from a desire to change this perception of the industry. They want the transportation industry to be given the respect it deserves and reduce the daily hassles of those working in the industry. They wish to make the industry “cool”, intelligent, transparent and lucrative for young professionals to join. This crave to eradicate the taint attached to the transportation industry ushered them to establish Truckola– company offering transport solution tailored to each customer.
Founders Raghav Himatsingka and Keshav Himatsingka are both engineers from the US from prestigious institutes. Raghav is a graduate of Stanford University & Georgia Tech and highly accomplished logistics entrepreneur. Keshav is a Computer Science & Mechanical Engineering graduate from Duke University. Keshav has firsthand experience of starting his own company through a foods venture called Desiann. They have been associated with the logistics/transportation for the last 10 years and have a deep understanding of the industry. They also have hands on experience in starting up companies and have started logistics businesses that now generate US$50 million in revenues annually.
Understanding Truckola
Company was registered in August 2015 and started operations in September.
The transport industry is a $85 billion dollar market annually. Truckola is targeting the intercity cargo transportation market which is the largest, most challenging and most unorganized sector of the transportation industry. The biggest issue in this market is information asymmetry which leads to:
- Cargo Owners don’t have the status of in-transit vehicles until the vehicle reaches its destination. They also don’t have any control or visibility on transit times.
- Vehicle Owners struggle for return loads and have to depend on brokers and agents for the same. This leads to idling of vehicles which incurs a huge cost.
- The lack of a demand and supply data creates a situation wherein for example, there is excess supply of vehicles in Nagpur with no demand and the reverse situation in Mumbai.
Truckola tackles them with data and predictive tools thereafter, these situations can be managed resulting in lower freight costs and higher utilization of vehicles. Truckola aggregates demand and supply to connect Vehicles with loads at optimal costs while also providing visibility on the transit vehicles. Since this industry is an age-old industry, the biggest competition Truckola faces is from the traditional ways of doing business. There is a lot of interest in the logistics sector this year from investors, but founders believe that they don’t have a direct competitor in what they are doing currently.
The biggest challenge in their business is fighting incumbent methods and trusting new companies (because of risks of pilferage and risks of money deployed). Fortunately, because of their long association with the industry, they have been able to manage these challenges fairly well.
Truckola’s competitive advantage is definitely their founding team. They have experience of starting up and running transportation businesses of $50 million dollar revenues. “We feel we are uniquely positioned to understand not only the tech side of the business but also the transportation side on a pan-India basis” says Keshav Himatsingka,Director, Truckola.
Their product differentiation is in that they make it very simple for users to adopt their technology without changing their present ways of functioning to an extent that even the single vehicle owner can work with them without facing a tech barrier. They offer complete transparency and reduce costs/increase earnings for all parties in the transaction.
Thus, Truckola helps increase earnings for all players in the industry.
Imminent Future
Within a span of just 4 weeks, Truckola has been able to register about 2000 vehicles and nearly 500 Cargo Owners on system. They also have a database of another 50,000 vehicles and 5,000 companies who they plan to reach out to as we expand operations. They have a team of 7 full-time employees and are adding people every week. They are looking at revenues of Rs. 1 crore in the month of October. They currently have the presence in about 5 cities through their associates.
Largely, they plan to expand operations to several more cities and improve upon their technology. Since they are purely a B2B company, most of the work happens behind the scenes but you will surely hear some exciting news about them in the coming months.
Truckola currently has funding from HNI investors of about US$200,000 and is in talk with a few VCs to raise a round of funding to expand operations at a faster pace and to scale up technology.
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