Trucking logistics firm Rivigo hits funding roadblock; talks to Flipkart, FirstCry for sale

Image: Facebook/@RivigoLogistics

Modern trucking logistics firm Rivigo is in deep trouble due to a prolonged funding slowdown. Only three years after it hit a valuation of $1 billion, the startup is unable to raise funds, and it is exploring a sale.

According to a report by ET, Rivigo has held talks with e-commerce marketplace Flipkart, and multi-channel baby products retailer FirstCry for a potential sale.

Due to investors' increased caution as a result of the prolonged economic slowdown, the unicorn logistics tech company has had difficulty raising new capital.

According to a source, the company's board decided a few months ago that looking for buyers was the best course of action and that remaining independent was no longer an option.

Rivigo’s cofounder and chief executive Deepak Garg said the company was not engaged in sale talks but was aiming to close a new financing round. "We are in advanced conversations with multiple financial and strategic investors to raise capital...,” Garg told ET in an email.

Troubles

Nearly two years ago, the company laid off nearly 70-100 employees to improve unit economics and operational efficiency.

The company also had to reportedly withdraw around 50 offers from 10 premier campuses before joining dates, including National Institute of Industrial Engineering, Indian School of Business, Indian Institute of Technology, and Indian Institute of Management.

After the company pivoted pivoted to relay-as-a-service model, its revenue dropped to less than Rs 1,000 crore and Garg said in May that the logistics company was operating at a revenue run rate of roughly Rs 700-800 crore.

In order to gain scalability and cut losses, the company switched in the previous two years from an asset-heavy to an asset-light approach. He said losses had reduced significantly as it turned asset light.

Rivigo’s cofounder Gazal Kalra has also left the company to start a new venture, which Garg confirmed.

IPO plans

Rivigo, operating on a 'relay trucking' model,  intends to seek $50-100 million in a pre-IPO (initial public offering) round in 2022 before going public in 2024, according to a report in May.

Founded in 2014 by Ghazal Kalra and Deepak Garg, the startup provides transportation services to the retail, e-commerce, pharmaceutical, automotive, and FMCG industries in India via a fleet of trucks.

In a Series H round headed by current investors Elevation Capital and Warburg Pincus affiliate Spring Canter Investment, Rivigo has raised Rs 16 crore (about $2 million).

The business had previously received Rs 84.4 crore from Elevation Capital in its Series G fundraising round. The business has successfully raised close to $270 million in total through a number of stock and debt financing rounds.