Logistics aggregator Raaho is looking to expand its services across India and is aiming to raise $20 million in the next 12 months to fund its expansion, the company’s co-founder and chief executive officer Mohammed Imthiaz said.
“We are planning to expand our operations from the current eight cities to 50 cities next year,” Imthiaz told Moneycontrol.
“The $100-billion trucking industry in India is unorganised, largely offline and plagued with massive deadhead and wastage. We are looking to tap into the marketplace and become the largest digital freight marketplace in the country,” Imthiaz said.
He added that Raaho, which uses technology to enable real-time tracking of freight, is also looking to become EBITDA (earnings before interest, taxes, depreciation and amortisation)-positive in the next two years.
Imthiaz said that just 10 percent of the Indian trucking industry currently works online, which presents a large growth opportunity for Raaho.
“It is estimated that around 20,000,000 trips are taken by trucks in India every month to transport goods and less than 10,000 trips are organised digitally,” Imthiaz said.
He said that despite the government’s initiative to shift cargo movement away from roads to railways and inland shipping, trucks will be essential for last-mile connectivity and the industry is only expected to keep growing as the economy grows.
Imthiaz added that the Indian trucking industry will adopt the use of electric commercial vehicles as soon as mass production of such vehicles starts. “Fuel costs for truck operators have risen substantially in the last few years and now make up around 47 percent of the total expenses,” Imthiaz said, adding that if diesel prices keep rising, the industry’s switch to electric vehicles will be faster than expected.
Towards this end, he suggested that fuel stations on national highways also start offering electric charging infrastructure to enable long-distance journeys using electric commercial vehicles.
“On an average, a truck stops every 400-500 km to refuel in India. If fuel pumps have fast charging infrastructure, electric commercial vehicles will also be equally efficient,” he said.
Imthiaz said that Raaho is also working with most logistics companies in India to provide trucks for transportation.
The Gurugram, Haryana-based company operates in the national capital region in the North, in Chennai, Bengaluru, Coimbatore and Hyderabad in the South, Kolkata in the East and Pune in the West. The company had raised Rs 12.5 crore ($1.65 million) as a part of its pre-Series A funding round in 2021.
Since its inception, Raaho claims to have successfully covered 20 million kilometres with over 15,000 trucks, catering to a customer base of more than 350 shippers. The company claims to have grown its business five times compared to the pre-Covid figures with profitable unit economics.
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