New Delhi: Private equity firm Warburg Pincus has invested $75 million (about Rs 500 crore) in surface transport logistics provider Rivigo Services for a minority stake, in one of the largest equity financing rounds raised by an Indian startup this year.
The investment, is the third transaction by the global PE firm in the country’s logistics sector, having already backed ecommerce-focused logistics solutions provider Ecom Express and third-party logistics company Stellar Value Chain Solutions over the past two years.
“This (funding) is going to be primarily utilized towards technology and hiring. We have to scale up our tech talent, investments in IoT, automation and data sciences a lot more. We also have to build our next level of leadership cadre, given the growth we’re seeing,” Deepak Garg, chief executive, Rivigo, told ET.
According to Garg, who co-founded the Gurgaon-based truck fleet operator with fellow McKinsey alumnus Gazal Kalra in 2014, the company is also poised to reap benefits of the recently-passed Goods and Services Tax (GST) Bill, which is expected to lead to faster turnaround times, create pull-based supply chains and help in the re-configuration of warehousing and distribution networks.
“The company is delivering a fundamentally superior proposition for customers and truck drivers by deploying a unique operating model, enabled by technology and analytics. The prospects are likely to be further enhanced upon implementation of GST,” said Viraj Sawhney, managing director, Warburg Pincus.
The investment is believed to have valued Rivigo, which competes with the likes of legacy operators such as GATI and Blue Dart, declined to share the specifics of the transaction.
The company, which serves sectors including ecommerce, frozen food, dairy, automotive and pharmaceuticals among others, has also developed algorithms and filed patents in the USA that deal with managing fuel efficiency and pilferage, availability of drivers in the relay system, and loading plans to help reduce damages to products carried by its trucks.
“We believe we can drive a lot of global innovation in trucking and logistics sector through what we are building at Rivigo,” Garg said, adding that the problems that Rivigo is solving are globally unsolved and a $2.5 to 3 trillion revenue market.
Sawhney will also join the Rivigo board, which also counts Myntra founder Mukesh Bansal as an independent director.
The company will continue to further build out its network of processing centres and pit stops across the country, as well as enhance its track fleet size to about 5,000 over the next 12 months. It currently operates currently about 1,500 vehicles, and employs about 3,000 drivers.