Mahindra Acquires Rivigo’s B2B Express Unit For Rs 225 Crore

Mahindra Logistics has acquired logistics startup, Rivigo’s B2B express cargo service unit for INR 225 crore in a slump sale. As per a regulatory filing to the BSE, this deal is expected to be finalised before November 1. 

Under the terms of the deal, Mahindra Logistics will acquire the express business, including the clients, team, and assets of Rivigo’s B2B express division, as well as its technology platform and overall brand, through a business transfer agreement (BTA).

According to rumours, Rivigo discussed a potential transaction with e-commerce platform Flipkart and multichannel baby goods shop FirstCry. As a result of the current economic recession, the logistics tech unicorn has struggled to obtain new money as investors become wary.

Rivigo deals in two primary business segments: full truckload (FTL) and business-to-business (B2B) express. According to the filing, its overall revenue in FY21 was Rs 634 crore, with the B2B express division accounting for Rs 295 crore of that. Rivigo’s B2B express business generated Rs 371.3 crore in FY22, which was smaller than the pre-Covid-19 pandemic turnover of Rs 528.5 crore in FY20.

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Rivigo’s rivals include Delhivery, Safexpress, Blue Dart, and Gati. The firm, valued at more than $1 billion when it conducted its last fundraising, will retain ownership of its truck fleet and the rights to the FTL operations.

The transaction represents a major value erosion for the firm because the valuation at which Mahindra Logistics purchased Rivigo’s B2B express segment is less than a one-time multiple of its revenue.

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