Surface transport logistics services provider Rivigo, is gearing up to spend between $80 million-$100 million in the new fiscal, as the SAIF Partners-backed venture looks to outdistance its peers, by expanding at a rapid pace.
Founded by IIT Kanpur and IIM Lucknow alum Deepak Garg and Stanford Graduate School of Business and Harvard Kennedy School of Government alumnus Gazal Kalra, the 15-month Gurgaon-based startup will be increasing its network of processing centres and trucking pitstops, while also growing its cold chain business – Rivigo Green.
“We are very focused on delivering high-quality service to our customers. In the B2B segment, reliability is of paramount importance. We want to change the way customers think about procurement and logistics. It should shape the business strategies of companies,” Garg, Chief Executive of Rivigo, told.
The company, which counts a number of multinational and domestic conglomerates, such as Nestle, Hindustan Unilever and Havells among its clientele, competes with a number of established logistics players, such as GATI, Blue Dart and TCI Group among others, as well as newer entrants in the space, such as Tiger Global-backed BlackBuck.
It serves the e-commerce, auto, agriculture and fast moving consumer goods sectors among others.
According to Garg, Rivigo will ramp up its current network of 41 trucking pitstops, and a similar number of processing centres, to over 200 across the country, over the next 12 months. It also expects to expand its trucking fleet size from its current 800, to between 2,500-3,000 over the same period.
“We are completely shifting away from the way things have worked for so many decades. Once you make that shift, you have to also prove the model for the entire ecosystem,” Garg said.
Unlike its venture-funded rival, BlackBuck, which works on an aggregator model, Rivigo owns the majority of its truck fleet, with a small portion contributed by aggregators. The company, however, will continue to own its fleet for the foreseeable future.
“We were the largest buyers of trucks last year, and have been this year as well… Till the extent, we can establish and growth the ecosystem to level, where we are confident that the same level of service can be achieved through the aggregation model, we will scale that,” he said.
The Chief Executive also confirmed that the venture is targeting a revenue run-rate of $100 million within the next three months. There are also plans to enter into, or grow its presence, in newer segments, such as secure goods and appliance movements.
Garg reiterated that there were no plans of raising a fresh round of equity financing.
“We have done the math, and there is money in the bank. We will grow by 3X-4X this year. Unlike most others, we have access to debt funding with banks. That’s the beauty of our business model,” he said.
The company has raised about $40 million in largely equity financing till date, from SAIF Partners, with a small component of venture debt funding from speciality debt financing firm, Trifecta Capital.
“If someone writes me a cheque today, I won’t take it,” said Garg.
Source: The Economic Times
