At a time of company-wide transition to improve unit economics and operational efficiency, Gurugram-based logistics startup Rivigo has reportedly laid off nearly 70-100 employees over the last few months.
The company also had to reportedly withdraw around 50 offers from 10 premier campuses before joining dates. This includes National Institute of Industrial Engineering, Indian School of Business, Indian Institute of Technology, and Indian Institute of Management.
Gazal Kalra, cofounder of Rivigo, attributed the recent attrition to “performance and market dynamics.” She also said campus placement offers have been rolled back as the company had outplaced most of those students.
Founded in 2014 by Gazal Kalra and Deepak Garg, Rivigo owns and operates over 2,100 trucks and has a pan-India network across 150 locations. It offers pan-India delivery services to ecommerce, pharmaceutical, automobile, cold-chain and fast-moving consumer goods companies. The company said it covers more than 29K pin codes in India.
Last week, the company said it raised $65 Mn as part of its Series E round and would use it to further strengthen its technology and network coverage. The company also said that it has significantly improved its financial metrics across all businesses and aims to be profitable by the end of this financial year.
However, the focus on metrics came in from investors who have been reportedly pressuring Rivigo to cut costs, move away from an asset-heavy business, and improve its unit economics across all business verticals.
The investors have reportedly said that the company has not been able to charge a premium for its fast relay service, and its asset-light freight business also had gaps, which led to misuse by some truckers. These people have also indicated that Rivigo has focused on significantly restructuring its business, and evolving a viable model, over the last one year.
“The company has been in the process of pivoting from an asset-heavy business model of owning trucks to an asset-light business model, and offer its relay model and data analytics as a service,” the report said.
For FY18, here are some key metrics of Rivigo:
- Rivigo’s revenue stood at INR 720 Cr
- Expenses were INR 990 Cr
- Employee benefit costs in the period stood at INR 115 Cr or 12% of total expenditure
- Rivigo’s “Property, plant and equipment” — largely the trucks it owns — at INR 372 crore
Kalra, however, said that Rivigo had significantly improved margins in the past year across its three lines of business – Full Truck Load, Part Truck Load and Freight Brokerage. She further said that the company’s gross margins have doubled and they are operating profitable — achieved through focus on operational efficiencies.
The company now aims to provide Relay-as-a-Service to small fleet owners through its freight platform, she said. Rivigo is yet to respond to Inc42 queries on the matter.
The Economic Survey 2017-18 showed that the Indian logistics sector provides livelihood to more than 22 Mn people and improving the sector will facilitate 10% decrease in indirect logistics cost leading to the growth of 5 to 8% in exports.
In the competitive logistics space, which is poised to touch by $215 Bn by 2020, Rivigo competes with equally strong investor-backed startups such as Blackbuck, Locus, Locanix, ElasticRun, and 4tigo Network Logistics.