IIT Kanpur alumni steers into online road transport marketplace

Bengaluru-based start-up Vahak, founded by IIT Kanpur alumni, claims to be India’s first online transport market app maker which enables shippers, trusted transporters, and truck owners to directly connect with each other. This is led by an absence of an effective business communication channel across India.

The traditional form of logistical support deals are fixed over phone calls and banks on these interactions for pricing and market demand. It limits the reach of the business, which results in lower consumption and inflated charges.

The company was founded by former Indian Institute of Technology (IIT) Kanpur students, Karan Shaha, co-founder and CEO, and Vikas Chandrawat, co-founder & CPO in 2019. This comes after one of Karan’s family members informed him about the acute problems in the road logistics industry.

In an exclusive interview with CIOL Karan said, there is a trust gap in the industry. Almost 100% of the industry players are working offline and have no online presence. Thus, there is reluctance among players in terms of dealing with unknown and non-verified players since the risk and transaction amount is very high. Furthermore, they also spoke about the inspiration behind the startup, the changes they have brought in the market, and much more.

Tell us about Vahak

Vahak is a technology driven online road transport marketplace. The company is transforming the Indian transportation sector by offering streamlined services which are currently lacking in the industry. Vahak enables shippers, trusted transporters and truck owners to directly connect with each other and help them in booking trucks, trailers and loads across India.

The marketplace also offers the opportunity for transporters to create an online brand for their business, generate leads, and increase their revenue. The platform offers an online user-friendly transport marketplace through which users can quickly make bookings at best prices. Customers can log on to the platform and book load or vehicle of their choice by directly connecting to other parties. Vahak offers access to lakhs of transporters and vehicle owners that are verified. It is this untapped trust gap that we aim to fill by creating a rich online profile and community on our platform.

What was the idea or inspiration behind the startup?

Vikas and I graduated from IIT Kanpur in 2015 right after which we started our careers. In 2016, one of my family members apprised me of the multiple problems in the road logistics industry. As freshers from college, we were passionate about creating an impact by addressing sector-specific problems. This motivated us to start a company in 2016 which further forced us to work at the ground level. During those 2.5 years, we met more than 1,000 transport companies and individual lorry owners. This experience gave us deep insights into the problems and helped us understand them better. To solve these issues at scale and for every single transport SME in the country, we launched Vahak in February 2019.

What changes have you brought into the market?

Vahak’s major customers are transportation companies and lorry owners. Consequently, there are two major gaps that we address.

First, the industry lacks a proper business communication channel. Most of the deals are fixed over phone calls and the SMEs are totally dependent upon these for price discovery and to understand the market demand and supply on a daily basis. This wastes a huge amount of their time and limits the reach and network of the business, which ultimately results in lower lorry utilization and highly fluctuating rates.

Second, there is a trust gap in the industry. Almost 100% of the industry players are working offline and have no online presence. Thus, there is reluctance among players in terms of dealing with unknown and non-verified players since the risk and transaction amount is very high. This factor hugely limits the lorry utilization in our country, as SMEs and owners usually wait for a longer duration to get their next business lead.

Our online network is built on the back of cutting-edge technology through which customers can connect directly with each other across India. Vahak also connects lorry owners with lakhs of transporters enabling them to constantly get new, return, as well as part loads and therefore, better financial security. Our platform also helps achieve market stability since the consistent monthly load ensures fair market price.

What has been your business growth and your plans now?

Since inception, Vahak has witnessed a good rate of growth and market traction. We are currently catering to about half a million transport companies. The journey started from Raipur, Chhattisgarh, and we on-boarded our first 500 transport companies through local networks in the area. Vahak has developed a service provider network of more than half a million truckers covering over 12,000+ locations across the country. The platform is growing at over 200% quarterly, and already manages more than 10,000+ daily active loads. The network now covers major transport and logistics hubs across India and is aiming at reaching $1 billion annual GMV in the next 12 months. The network currently covers all major hubs including New Delhi, Mumbai, Ahmedabad, Pune, Kolkata, Chennai, Visakhapatnam, Raipur, Bhilai, Bhopal, Lucknow, Bengaluru, Kochi, Chandigarh, Vapi, Surat, Nagpur, Patna, and Indore.

Going forward, Vahak aims to focus on creating a strong nationwide presence and onboard more than 3 million truckers. As per an India Brand Equity Foundation (IBEF) study, the logistics sector will have annual investments to the tune of $500 billion by 2025. There is a rapid technology integration being witnessed in the sector with the arrival of robotics, automation, data analytics, AI and IoT technologies. Vahak aims to use such cutting-edge technologies to further simplify logistics and bring more efficiency to the transport industry.

Funding?

The incredible potential of Vahak has been well backed by investors. We have received seed funding in a round led by Leo Capital and prominent angel investors such as Amit Gupta (Founder, Yulu Bikes); AbhishekGoyal (Founder, Tracxn); Ramakant Sharma (Founder, LivSpace); Harsh Pokharna (Founder, OkCredit); and ArchanaPriyadarshini (Angel investor, and ex Unicorn India Ventures Partner). We have also raised $5million Pre-Series A funding from RTP Global with participationfrom Luxor Capital and Leo Capital.The other marquee angel investors included Kunal Shah, Founder and CEO, Cred; JitendraGupta, Founder and CEO Jupiter; ViditAatrey and SanjeevBarnwal, Co-Founders, Meesho;MohdFarid, Co-Founder, Sharechat; Amrish Rau, CEO, Pine Labs; Harsimarbir Singh, Co-Founder, Pristyn Care; Rohit and KunalBahl, Co-Founders, Snapdeal; and Ravish Naresh, Co-Founder and CEO, Khatabook.