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Vahak is not only an open marketplace for truckers, but it also provides drivers with services like healthcare and discounted fuel cards. The Bangalore-based company announced today it has raised a $14 million Series A. The round was led by Nexus Partners, with participation from Foundamental, iSeed Ventures, Leo Capital, RTP Global and Tital Capital.
This brings Vahak’s total raised so far to $20.3 million since it was founded in 2020 by Karan Shaha and Vikas Chandrawat. The two met while they were studying mechanical engineering at IIT Kanpur. Shaha says they decided to found Vahak was because of the problems he saw one of his relatives, who owns a factory, deal with.
“The problem was related to truck booking,” Shaha says. “Irregular freight, lack of communication channels, distrust and a lack of visibility were evident. On digging deeper, we understood that it was a huge nationwide problem that needed improvement immediately.”
Vahak initially provided transportation services in Raipur, Shaha’s home town. After operating for more than two years, “we understood the problems a transporter faced on a day-to-day basis,” he said. “Irregular earnings, insane work hours, lack of proper healthcare, to name a few.” As a result, Vahak pivoted to a pure-tech model in 2019 and launched the next year.
Vahak connects people who have goods to ship with truckers and enables payments through the apps. The company says that Vahak Payments prevents fraud by securing transactions, letting drivers get paid more quickly and enables quick refunds if necessary.
The company’s goal is to scale its operations to 10% of India’s logistics markets and grow from 1.5 million users currently to 10 million within a year.
Shaha says that the Indian transport industry is “highly unorganized and fragmented,” despite being worth $200 billion. About 70% of trucks are owned by one person, who also drives the truck. In order to secure bookings, they usually rely on phone calls.
“This creates silos where personal network of connections are the only way to know someone’s credibility,” said Shaha, adding that it usually takes lorry owners two to three days to find their next order. Shaha says that truckers who join the platform can operate for 25 to 26 days a month, instead of 12 to 15 days, because bookings happen faster.
Vahak’s app also offers drivers doctor consultations through telehealth company Medibuddy, health and transit information and fuel cards that can be used to buy gas at discounted rates. Shaha said those features were added because India’s trucking industry “lacks an efficient ecosystem to support the life of truck drivers and small owners.
The company is currently in pre-revenue stage, but Shaha said that in the future it will monetize through value-added services, like escrow, insurance, fuel, GPS and direct commissions on transactions.