By Jasvir
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Updated On: 17-Nov-2023 06:25 AM
Tata Motors will have a stronghold in the digital end of the truck business in India by acquiring Freight Tiger. With most of the goods being transported by trucks, this acquisition can be beneficial for Tata Motors as their market share will also grow.
Tata Motors acquired a 26.79% share in the digital freight logistics solutions company - Freight Tiger which holds a total 4% freight in the country; with an INR 150 crore investment
Tata Motors announced a 26.79% stake acquisition in the Freight Tiger for INR 150 crore last month. The company is also planning on investing another INR 100 crore in 2-3 years. The Freight Tiger business is already valued at INR 420 crore and Tata Motors will aim to step up its growth rates in upcoming years.
Freight Tiger is a digital platform known for its end-to-end logistic value chain solutions in cargo transportation. Additionally, the company claims to be accounting for a total of 4% of all freight in the country and they are expecting a growth of up to 20% by 2028 in India. This ambitious goal of Freight Tiger indicates that Tata Motors may have made a smart and profitable investment.
In India, most of the goods and materials are transported via trucks and road freight accounts for around 70% of goods movement. Tata Motors will have a stronghold in the digital end of the truck business in India by acquiring Freight Tiger. With most of the goods being transported by trucks, this acquisition can be beneficial for Tata Motors as their market share will also grow.
The Chief Financial Officer at Tata Group, P B Balaji said, “The company will invest INR 150 crore. The money has already gone out of our bank for this one and we are now at 26.79% owner where CPs have been completed and in the next two to three years we will invest an additional INR 100 crore as required, and thereafter we will have the right to buy the other investors at their fair market value. A very interesting transaction, something we are very excited by.”
Freight Tiger already has a few existing investors including Lightspeed India Partners and the venture capital arm of Eastern Pacific Shipping.
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Balaji said that while a lot of investments have gone into trucks the same is not true for freight ordering or management. He added, “Therefore this is an area where Freight Tiger solves that problem, by providing an end to end digital software as a service solution. Fleet Edge is a trucking product that we have which sits on our connected vehicle platform and helps both fleet operators and drivers. By integrating these two, we can give a comprehensive freight management solution.” indicating a necessity to invest in the digital platforms supporting the truck industry.
Fleet Edge is a strong platform that helps in the overall truck ecosystem and Freight Tiger deals with the logistics ecosystem. The company is aiming to combine both these platforms to create an efficient solution for freight management.
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