[What The Financials] Rivigo Revenue Grows To INR 1,080 Cr In FY20; Asset-Light Model Remains Chief Focus

Gurugram-based logistics startup Rivigo has recorded a 5% increase in its revenue in the financial year 2020 that ended in March last year. The company reported a revenue of INR 1,080 Cr in FY20 versus INR 1,028 in FY19. Rivigo’s expenses also grew another 5% from INR 1,532 Cr to INR 1,622 Cr in the same time period, leading to a 6% increase in losses from INR 511 Cr to INR 541 Cr.

The company’s operational revenue, which is majorly based on the sale of services, also grew at the same pace from INR 1,002 Cr to INR 1,054 Cr. It’s other income or non-operating revenue some-what remained consistent at INR 262.2 in FY20 and INR 262.8 in FY219. The interest income from non-current investments, which is a part of non-operating income, decreased 4.5% from INR 175 Cr to INR 167 Cr in the same time frame.

Founded in 2014 by Gazal Kalra and Deepak Garg, Rivigo offers pan-India delivery services to ecommerce, pharmaceutical, automobile, cold-chain and fast-moving consumer goods companies. The company says that it covers more than 29K pin codes in India.

The logistics startup has raised $268.7 Mn in funding to date, from marquee investors like Trifecta Capital Advisors, Elevation Capital (formerly known as SAIF Partners, Warburg Pincus, KB Global Platform Fund and others. The company had entered the unicorn club in 2018, after raising $50 Mn in Series D round. As of March 2020, Deepak Garg owns 83.6% of the total shares of the company, Elevation Capital owns 9.54%, Spring Canter Investment owns 2.22% and employees own 0.31% of the stock.

Inc42 had reached out to Rivigo seeking more clarity on its financial performance in FY20 and FY21, however, we did not receive a response till the time of publishing. 

Rivigo Looks To Cut Costs Under Investor Pressure? 

Rivigo did manage to cut its employee benefits expenses by 11% year-on-year, from INR 243.3 Cr to INR 216 Cr. This was primarily due to the layoffs that took place, impacting 70-100 employees, in the Q1 of FY20.  At that time, cofounder Kalra attributed the attrition to “performance and market dynamics”.

However, media reports highlighted that Rivigo’s investors had been pressuring the company to cut costs, move away from an asset-light business and improve its unit economics across all business verticals.

With this. the company had attempted to convert itself from an asset-heavy business to an asset light one, with the shift to relay-as-a-service model in August 2019 (FY20). RaaS was offered to Rivigo’s fleet owners using its technology, pilots and a countrywide network of relay pit-stops. The success of this plan will only be clear once Rivigo’s financial statement for 2021 (April 2020-March 2021) is out.

The five percent increase in Rivigo’s spending was majorly due to increase in ‘other expenses’, net provisions charge and ‘depreciation, depletion and amortisation expenses’, which is the reduction in the value of an asset. Rivigo’s net provisions charge increased 449% or 5.4X year-on-year, from INR 33.4 Cr to INR 183 Cr in FY20. Whereas depreciation, depletion and amortisation expenses increased by 17%.

The company’s total other expenses, which includes those expenses that are non-operating in nature and have no relation with the main business operations, increased 8%, from INR 1,126 Cr in FY19 to INR 1,216.2 Cr in FY20. Majority of this expense was trip expenses,  which was not described in the financial statement, that decreased 4% from INR 916 Cr in FY19 to INR 877 Cr in FY20. The logistics startup’s other expenses, another subsection in ‘total other expenses’, increased 62% from INR 209 Cr to INR 338.7 Cr in the same time period.