Rivigo set to join club of profitable Unicorns, achieve cash break-even

Technology-enabled logistics firm Rivigo said on Friday that it is all set to become one of the first unicorns to turn profitable, and expects to achieve cash break-even in the current fiscal. The company added Rs 300 crore to its top line last year, which is a 45 per cent annual growth, 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 Rs 600 crore for the financial year 2019, compared to a loss of Rs 270 crore in 2018.  Rivigo said earlier that it shifted focus away from building a freight marketplace, and is making technology-centric 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 to bring benefits of its disruptive relay trucking model to millions of fleet owners and truck pilots (drivers) in the country. 

The recently piloted RaaS will offer fleet owners Rivigo’s technology, access to relay pilots and countrywide network of relay pit-stops. Besides giving fleet owners access to pilots, a higher truck utilisation, it will also make its patented fuel solution as well as the maintenance and cashless payment solutions available to fleet owners across the country. 

In a report on logistics released by government policy think-tank NITI Aayog last year, 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 in India. 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.

“In a country like India, where quality of infrastructure and asset is a challenge, end-to-end controls fueled by deeper technology will give customers a better experience and create disruption for the industry in the long run. Hence, our focus is on strengthening the relay trucking technology and offering it as a service for fleet owners,” added Kalra.

Started in 2014 by McKinsey alumni Deepak Garg and Gazal Kalra, Rivigo was driven by the mission to bring positive transformation in the lives of truck drivers and address the challenge of chronic driver shortage. 

Rivigo used technology to ensure truck drivers do not have to drive for long stretches without rest, by scheduling roster duty at pitstops, pick-ups and deliveries, ensuring there were fewer unscheduled stops and by putting fuel theft to an end. The company turned operating earnings before interest, taxes, depreciation, and amortisation (EBITDA) profitable in March 2019, it said.