Even as logistics firm Rivigo continues to successfully raise funds in its ongoing Series E round, there have been pink slips aplenty at the company. The Gurugram-based company has laid off 70-100 employees over the last few months, mainly in its freight marketplace team, The Economic Times reported. Moreover, it withdrew around 50 offers from 10 premier campuses, including Indian School of Business, Indian Institute of Technology (IIT), Indian Institute of Management (IIM) and National Institute of Industrial Engineering, ahead of the mentioned joining dates.
This news comes less than a week after Rivigo announced raising $65 million (about Rs 445 crore) from existing investors Warburg Pincus and SAIF Partners, which it intends to deploy in further strengthening its technology and network coverage. Launched in 2014, the startup boasts the largest network coverage with over 29,000 pin codes in India. It works on a relay trucking model that allows drivers to drive for a maximum of four-five hours at a stretch and reach home the same day.
Gazal Kalra, the cofounder of Rivigo, told the daily that "performance and market dynamics" were the causes for the attrition. She also confirmed that campus placement offers have been rolled back, adding that the company had outplaced most of those students. This development comes at a time when the startup has been under pressure from investors to cut costs, move away from its current strategy of owning trucks to an asset-light business model, and improve its unit economics across all business verticals.
Sources in the know told the daily that Rivigo 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. They added that over the past year, the company has focused on significantly restructuring its business and evolving a viable model.
However, according to Kalra, Rivigo has managed to significantly improve margins in the past year across its three lines of business - Full Truck Load, Part Truck Load and Freight Brokerage. "Our gross margins have doubled, we are operating profitable - achieved through focus on operational efficiencies," she added. The company now aims to provide Relay-as-a-Service to small fleet owners through its freight platform.
As per regulatory filings sourced from Tracxn, Rivigo's revenue stood at Rs 720 crore on expenses of Rs 990 crore in FY18. Employee benefit costs in the period stood at Rs 115 crore.
(Edited by Sushmita Choudhury Agarwal)