Surface transport company Rivigo has laid off 70-100 employees over the last few months, mainly in its freight marketplace team, multiple people aware of the matter said.
The Gurugram-based company, backed by Warburg Pincus and SAIF Partners, also withdrew around 50 offers from 10 premier campuses, including National Institute of Industrial Engineering, Indian School of Business, Indian Institute of Technology, and Indian Institute of Management, before the joining dates, documents sourced by ET indicate.
Confirming the layoffs, Gazal Kalra, the cofounder of Rivigo, attributed the recent attrition to “performance and market dynamics.”
She also said campus placement offers have been rolled back, adding the company had outplaced most of those students.
This comes at a time when Rivigo has been under pressure from investors to cut costs, move away from an asset-heavy business, and improve its unit economics across all business verticals.
Rivigo said last week it had raised $65 million (about Rs 445 crore), led by existing investors. This is the second round of funding led by Warburg Pincus and SAIF Partners, after a gap of 18 months.
The company 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, three investors who evaluated the company and two former top executives told ET.
These people indicated that Rivigo has focused on significantly restructuring its business, and evolving a viable model, over the last one year.
“The company has been in the process of pivoting from an asset-heavy business model of owning trucks to an asset-light business model, and offer its relay model and data analytics as a service,” they said.
Rivigo’s Kalra, however, said the company had significantly improved 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,” Kalra said.
The company now aims to provide Relay-as-a-Service to small fleet owners through its freight platform, she said.
Rivigo’s revenue stood at Rs 720 crore on expenses of Rs 990 crore in the 2018 fiscal year, regulatory filings sourced from Tracxn show.
Employee benefit costs in the period stood at Rs 115 crore or 12% of total expenditure. For the fiscal year, Rivigo’s balance sheet shows “Property, plant and equipment” — largely the trucks it owns — at Rs 372 crore.
Depreciation expenses stood at Rs 72 crore, the Tracxn data show.
Rivigo, founded in 2014 by McKinsey alums Garg and Gazal Kalra, 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. The company’s offering includes relay-led trucking and freight marketplace.
The developments come at a time when India’s technology-based logistics sector has seen significant investment interest from large global investors.
In May, BlackBuck, raised $150 million from Goldman Sachs Investment Partners and Accel US, with participation from B Capital and Sequoia Capital.
In March, Delhivery raised more than $400 million in its latest round of equity financing which was led by SoftBank Vision Fund, valuing the company at over $1 billion.