Warburg Pincus-backed logistics unicorn Rivigo shrinks losses 31% in FY20; revenue up marginally

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February 7, 2021 7:59 PM

Rivigo had spent Rs 1,483.5 crore to earn operating revenue of Rs 1,055.9 crore in FY20 vis-à-vis Rs 1,630.8 crore spent for Rs 1,005.3 crore operating revenue in FY19.

Rivigo had turned unicorn in September 2019 after raising $4.9 million from a South Korean fund KB Platform Fund. (Representative image)

Logistics-tech unicorn Rivigo has managed to reduce losses and post a marginal rise in total income in FY20 on a consolidated basis. The intercity long-haul logistics service provider Rivigo, which is backed by Warburg Pincus, Elevation Capital, others, reported a 31 per cent decline in net losses from Rs 602.2 crore in FY19 to Rs 412.8 crore in FY20 while revenue increased 4.1 per cent from 1,028.5 crore to Rs 1,070.7 crore during the said period, according to the regulatory filing sourced from business intelligence platform Tofler. Importantly, the company had spent Rs 1,483.5 crore (expenses) to earn operating revenue of Rs 1,055.9 crore in FY20 vis-à-vis Rs 1,630.8 crore spent for Rs 1,005.3 crore operating revenue in FY19. The expenses dropped by 9 per cent from FY19 to FY20.

Rivigo, nonetheless, is “taking all necessary steps to consolidate the business and accelerate the Company’s performance to make it a profitable concern. The company has also been driving the agenda of accelerating alternate revenue growth through the year,” the filing read. Consolidated operations of the company included subsidiaries Rivigo Freight Private Limited and Cloudtech Services Private Limited. Rivigo had raised Rs 379.75 crore during FY20.

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Founded by Deepak Garg and Gazal Kalra in 2014, the standalone revenue for the company for FY20 was Rs 1,080 crore in comparison to Rs 1,028.8 crore in FY19 while losses increased from Rs 510.3 crore in FY19 to Rs 542.2 crore in FY20. Standalone expenses also increased from Rs 1,539.2 crore to Rs 1,622.3 crore. “The company is focusing on collection of outstanding dues from the customers, increase in customer base, increase the utility of vehicles, optimizing technology use in operations of the company besides reduction of the cost. The management of the Company is committed to accelerate the Company’s growth map and path,” the filing noted.

Rivigo had turned unicorn in September 2019 after raising $4.9 million from a South Korean fund KB Platform Fund. It currently competes with the likes of Blackbuck, Fortigo, Gati, etc. The logistics sector in India is around $160 billion with road logistics being its major player. However, truckers, transporters, retailers, and mechanics complain of a trust deficit likely due to the opaque network of middlemen and small operators, according to Deloitte. This has led to challenges such as fragmented ownership, demand and supply mismatch, low utilization, low pricing, low returns, and low wages. Rivigo operates on a ‘relay-as-a-service’ model where drivers drive for four-five hours from their base location to ‘relay’ the truck to another driver and drive back another truck to his base location that saves long hours for drivers on the road.

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