Under the agreement, Mahindra Logistics will acquire the express business through a business transfer agreement (BTA), including the customers, team, assets, technology platform and brand.
The deal is expected to be closed on or before November 1, the companies said in the filing.
ET reported in August that Rivigo had held talks with ecommerce marketplace Flipkart and omnichannel baby products retailer FirstCry for a potential sale. The logistics unicorn was struggling to raise fresh funds as investors turned skittish due to the ongoing economic slowdown.
Rivigo operates in two key business segments – full truck load and B2B express business. In FY21, the company’s total revenue was Rs 634 crore. The B2B express business accounted for nearly half of this, with Rs 295 crore in revenue, according to the BSE filing. During FY22, Rivigo’s B2B express business had a turnover of Rs. 371.3 crore, which was still less than the pre-pandemic revenue of Rs 528.5 crore it generated in FY20.
Rivigo, valued at over $1 billion when it last raised funds, will continue to own its truck fleet and the rights to the full truckload (FTL) operations. The Gurgaon-based startup, which operated a ‘relay trucking model’, pivoted to relay-as-a-service during the pandemic. Garg said at the time that the pivot made the company more sustainable and conducive to scaling. It had ambitions of raising $50-100 million and going public by 2024.
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“The company is not in great health. It has tweaked its business model in the past from being an aggregator to being asset-heavy and owning trucks to now being asset-light… its fleet size reduced significantly from 3,000,” a person in the know had told ET. The company owned about 1,000 trucks as of August.
The acquisition is expected to augment Mahindra Logistics’ existing B2B express business through the use of Rivigo’s network, technology and process capabilities. Rampraveen Swaminathan, CEO, Mahindra Logistics, said, “B2B express logistics continues to see strong tailwinds as customers focus on deepening delivery networks, enhancing digital adoption and investing in agile supply chains. This acquisition will enhance and strengthen our offerings and reach for our customers in the B2B express and PTL (partial truck load) space.”
Deepak Garg, CEO of Rivigo Services Private Limited, said, “Rivigo has its foundation in the relay full truckload business. Over the years, we have built a strong brand in the PTL/express services with a pan-India network and high-quality technology and service backbone. We believe the customers and employees of our PTL business will benefit greatly from being part of a high-quality, end-to-end supply chain services company like Mahindra Logistics.”
Backed by venture fund Elevation Capital (formerly SAIF Partners), private equity major Warburg Pincu and others, the Gurugram-based logistics firm has faced headwinds over the past few years. Last year, one of its cofounders Gazal Kalra left the company. In May, Garg told ET that the last couple of years had been “turbulent” and “painful” for the logistics unicorn.
