Priyanka Sahay
Moneycontrol News
Warburg Pincus-backed logistics service provider Rivigo plans to extend its product offerings by launching warehouses across the country, a top executive has said.
“The relay system is today solving one element of the picture, that if you want something to be delivered very quickly we are your partners and we will get it done. But from a company’s point of view, they are looking at an end to end partner who can provide them the most innovative warehousing solutions and that is an area which we are interested in getting into,” said Kapish Saraf, head of Rivigo's marketplace business in an interaction with Moneycontrol.
However, he declined to share a timeline or other details on the investment that will go into this segment.
"Exact numbers I cannot comment on but to give you a perspective the environment today is very conducive to it. See post GST people said that a lot of consolidation of warehousing would happen. But what people forget to understand is that it will always be followed by efficiencies in trucking because for companies it is not an experience thing, it is about running a business. So when a company starts seeing that the efficiency of trucks are improving, the same truck which used to deliver in four days is now delivering in three days that is when they want to say, I want to change my entire warehousing pattern," he said.
"Second thing is that this government has actually given this industry now an infrastructure status which makes the cost of capital lesser. So these two phenomenon will actually result in companies becoming more open to saying, I actually want to partner with large companies who can create such large warehouse or logistic parks," he added.
Rivigo has roped in Vibhanshu Abhishek, who is a professor of information systems management at Carnegie Mellon University in an advisory role to help the company build the data science team.
Rivigo, which earlier this year closed a $50 million funding round from two of its existing investors, Warburg Puncus and SAIF Partners runs a relay model of trucking with the help of technology. The company has claimed that it ensures truck drivers who were on the road for multiple days at a stretch, now sleep at home each night.
Their fleet of trucks run non-stop even as drivers work in shifts. The relay system allows drivers to hand over trucks to the next driver at a pit stop that would fall on their route. The first driver then gets on to the truck that is returning to his direction. This whole process ensures that he is back home by the end of day.
Last year, the company was reported to be in talks with SoftBank to raise a fresh round of funding. There was no immediate clarity on the status of the deal and Saraf declined to comment on it.
“If you take a step back, fundamentally what we are doing for our customers is unlocking value. Where do most of the companies, lose value? They have demands in particular regions and they are not able to cater to that demand. You face stock-outs in the areas where you have demand and in the areas where the demand is minimum that is where you are holding a lot of inventory. So fundamentally what we look at our role as that we will be partnering with these companies to maximise their revenue and reduce their entire inventory cost," he said.
The company currently works with 500 large corporates. In the small and medium enterprises segment, it has about 5,000 customers. It plans to reach out to at least 2.5 lakh SMEs by 2019.
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