MUMBAI: Tata Motors, the flagship of the $100-billion Tata Group, has picked up 26% in freight aggregator TruckEasy, marking its first stake-purchase in a domestic startup.
The transaction, for which the investment amount wasn’t disclosed, gives Tata Motors two seats on the board of the three-year-old, Bengaluru-based TruckEasy.
The $45-billion automobile giant will help TruckEasy to scale up its operations in an effort to acquire more customers, expand beyond its home city and compete with other logistic startups like Porter, Blackbuck and LetsTransport.
According to Tata Motors, the stake-purchase will provide “insights into the rapidly growing technology-driven freight logistics business”. The company has routed its investment in TruckEasy through its wholly owned arm Tata Motors Finance Holdings.
Interestingly, three years ago, the Tata Group sold its logistics company Drive India Enterprise Solutions to the TVS Group. Started by three young entrepreneurs — Nikhil Thomas, Vikram Kodgi and Avinash Achar — TruckEasy follows an Uber-like business model, where through an app it connects customers looking to move freight with truck operators.
While TruckEasy is Tata Motors’ first investment in an Indian startup, its overseas arm Jaguar LandRover has backed several new-age outfits such Lyft — a US-based taxi hailing app, SPLT — a carpooling startup targeted at corporate employees, and GoKid — a ride-sharing platform focused on school kids.
Tata Motors’ bet on TruckEasy could boost its commercial vehicle business — which in June clocked a 50% growth in sales — and have a play in the emerging technology-led mobility platforms.
The TruckEasy deal will aid to stay closer to the final customer, and enable to provide better products. Moreover, the data analytics provided by TruckEasy will be used for research and development, thereby allowing for better customisation of product specifications, Tata Motors said in a statement.
Besides TruckEasy and Lyft, the Tata Group has investments in Lyft’s rival Uber. Additionally, the group’s chairman emeritus Ratan Tata, in his personal capacity, has investments in homegrown taxi app operator Ola.