Mahindra Logistics recently acquired the B2B Express delivery business of Rivigo. Mahindra aims to leverage Rivigo’s existing network to bolster its own third-party logistics (3PL) services. Rivigo’s technology and process capabilities will help Mahindra Logistics drive synergy in its own network and customer service. As per a BSE filing, the B2B business was acquired for Rs 225 crore.
It has been reported that the sale of the B2B Express business comes amidst financial problems and has been made on a ‘slump sale basis’ by Rivigo. However, Mahindra Group chairman, Anand Mahindra took to Twitter to share his thoughts on the acquisition. He wrote, “I was an admirer of Rivigo’s startup business model. Unfortunately, it encountered challenges. We’re buying just the Express business, but happy to keep its legacy alive. This is also evidence that enormous value lies in the synergy between new-age startups and large companies”
I was an admirer of Rivigo’s startup business model. Unfortunate that it encountered challenges. We’re buying just… https://t.co/l6f8M4gzcI
— anand mahindra (@anandmahindra) 1664864912000
Rivigo Express is one of India’s largest B2B shipment businesses covering over 30,000 pin-codes and has over 250 processing centres and branches spanning an area of more than 10 million square feet.
As reported by the Economic Times, Mahindra Logistics managing director Rampraveen Swaminathan said that the Rivigo deal will help the company nearly triple its own express delivery business to more than Rs 500 crore value in a year. The report quotes Swaminathan clarifying that while media reports suggest financial problems for Rivigo, their own evaluation suggests that the business shows good service quality metrics, positive unit margins and good revenue yield per kilo or tonne.
The combination of Mahindra logistics and Rivigo’s operations will provide the required scale to make the B2B Express business profitable. As per the deal, Mahindra has acquired customers, teams, assets, technology platform and the overall Rivigo Express brand. This will include around 1,300 on-ground executives who will now move to Mahindra Logistics from Rivigo.
The acquisition is being seen as a move by Mahindra Logistics to diversify away from its full truck-load business. The integration of both businesses is expected to be complete in 12 months’ time.
Over 90% of all startups fail. Many had no chance of survival in the first place. But many fail because of one-off… https://t.co/LErk31C4Wx
— anand mahindra (@anandmahindra) 1664871339000