Mahindra Logistics is acquiring Rivigo Services Private Limited B2B express business for Rs 225 crore, according to the former stock exchange disclosure. Under the terms of the agreement, Mahindra Logistics will acquire the express business, including RSPL B2B express business customers, equipment and assets, RSPL technology platform & the Rivigo brand.
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Mahindra Acquires Rivigo
Surface logistics unicorn Rivigo had been seeking an M&A deal for quite some time as the company had failed 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 failed.
Rivigo’s express B2B network currently covers more than 19,000 PIN codes with more than 25 processing branches. It is worth noting that its B2B express business contributed over 58% or Rs. Rs 371.3 crore to the company’s total revenue in FY21. Rivigo’s total operating income dropped by 40% to Rs 634 crore for the fiscal year ending March 2021.
Basically, this indicates that the deal is highly problematic as Rivigo sold its B2B express business for less than its FY21 revenue. Rivigo is the first unicorn to shake off this funding winter that has seen massive layoffs, correction of valuation, closings 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 in multiple rounds of equity and debt financing to date. (Mahindra Rivigo)
The pandemic disrupted business in every sector, but full-stack logistics companies were among the hardest hit. According to experts, Rivigo was no exception and its problems deepened in the post-pandemic period. The company had to deal with the burden of fixed costs, and even when they switched to an asset-light model to escape this, the result was that the company lost customers. All this got worse and has led Rivigo to its current situation.