Mahindra Logistics acquires Rivigo’s B2B express biz in a fire sale

Mahindra Logistics is acquiring Rivigo Services Private Limited’s B2B express business for Rs 225 crore, as per the former’s disclosure with the stock exchange. Under the terms of the agreement, Mahindra Logistics will acquire the express business including the customers, team and assets of RSPL’s B2B express business, RSPL’s technology platform and the Rivigo brand.

Surface logistics unicorn Rivigo was looking for a merger and acquisition deal for quite some time as the company hadn't managed to raise an external round. The cash-strapped logistics unicorn had already sold 80% of its truck fleet and its attempt to switch to an asset-light model also didn’t work out.

Entrackr reported about the company’s struggle on August 24.

Rivigo’s B2B express network currently covers over 19,000 pin codes with over 25 processing branches. It’s worth noting that its B2B express business contributed over 58% or Rs. 371.3 crore to the company’s total collection in FY21. Rivigo’s total operating revenue shrank 40% and stood at Rs 634 crore during the fiscal year ending March 2021.

This essentially indicates that the deal is a highly distressed one as Rivigo sold out its B2B express business for less than its FY21 revenue. Rivigo is the first unicorn to shake in this funding winter which has been witnessing mass layoffs, valuation correction, shutdowns and consolidations.

Founded in 2014 by Deepak Garg and Gazal Kalra, Rivigo was once hailed as a disruptor in the B2B logistics space and the company also became the first unicorn in the trucking or B2B logistics space. It has raised around $300 million across multiple equity and debt financing rounds to date.

The pandemic disrupted the businesses across sectors but full-stack logistics companies were among the worst affected. According to experts, Rivigo was no exception and its woes deepened in the post pandemic period. The company had to deal with the burden of fixed costs, and even when they moved to an asset-light model to escape this, the result was the company losing clients. All of this compounded and has brought Rivigo to their current predicament.