Rivigo set to join club of profitable Unicorns, achieve cash break-even
Technology-enabled logistics firm Rivigo on Friday said it was all set to become one of the first unicorns to turn profitable. It expects to achieve cash break-even in the current financial year. The firm added ~300 crore to its top line last year — an annual growth of 45 per cent — according to the Gurugram-based firm’s statement.
According to the Economic Survey of 2018, the country’s logistics market is expected to touch about $215 billion in 2020, growing at a compound annual growth rate (CAGR) of 10.5 per cent.
Rivigo had raised $65 million in July this year, as part of its ongoing series-e round, led by existing investors Warburg Pincus and SAIF Partners.
According to reports, the company’s loss widened to ~600 crore during FY19, compared to a loss of ~270 crore in 2018.
Rivigo had said earlier that it had shifted focus away from building a freight marketplace, and was making techcentric investments for the long term. “We believe it is important to build a freight marketplace with real value for customers and fleet owners. Through Relay as a Service (Raas), we directly address the inefficiencies in trucking, solve the challenges faced by small fleet owners while providing a better customer service. It is a necessary step towards becoming a profitable company that looks at a business model that not only adds to the top line but bottom line also and elevates the quality of service to an industry benchmark,” said Gazal Kalra, co-founder, Rivigo.
Rivigo is working on building a Raas model to bring benefits of its disruptive relay trucking model to millions of fleet owners and truck pilots (drivers). The recently piloted Raas will offer fleet owners Rivigo’s tech, access to relay pilots and countrywide network of relay pitstops. Besides giving fleet owners access to pilots and a higher truck utilisation, it will also make its patented fuel solution and the maintenance and cashless payment solutions available to fleet owners.
In a NITI Aayog report, the Logistics Performance Index (LPI) – the World Bank benchmarking standard – ranked India at 44 among 160 countries, with a score of 3.18 while Germany had the highest score of 4.2. “India’s LPI can be further improved by reducing clearance time, optimising border procedures (speed, simplicity and predictability of formalities) and improving quality of infrastructure (like improving quality of roads, rail and ports, developing intermodal hubs, digitisation and technological advancements). India can understand focus areas for investments and policy initiatives through a thorough analysis of LPI trends,” NITI Aayog had noted.
Rivigo has long been focused on improving the logistics sector with the help of technology. Earlier this year, it introduced a National Freight Index (NFI), which gives a measure of the road freight market. It is based on a Rivigo rate exchange, which gives a live spot rate on over 7 million lane and vehicle type combinations in the country.
The firm was started in 2014 by Mckinsey alumni Deepak Garg and Kalra. The firm said it turned operating earnings before interest, taxes, depreciation, and amortisation profitable in March 2019.