ETtechBengaluru: Logistics aggregator Shiprocket said it has acquired a majority stake in rival Pickrr through a cash-and-stock deal valuing it at around $200 million, triggering a significant consolidation in the industry at a time large third-party logistics companies are at loggerheads with aggregators.
Zomato and Temasek-backed Shiprocket is also in the final stages of closing its acquisition of the India business of smaller rival Shyplite. ET has seen emails to Shyplite merchants about the transfer of the business to Shiprocket, but the company did not comment on this deal.
While Shiprocket has acquired around 80% in Pickrr already, the deal is for a 100% stake purchase which will be completed in the next coming months. Pickrr founders together owned close to 40% in the company, as per Tracxn data as of August 31, 2021. IIFL Asset Management and Omidyar Network India are among Pickrr’s institutional investors.
Shiprocket founder and chief executive Saahil Goel said the Pickrr deal will be complementary to the company's capabilities as the latter was focused on relatively bigger direct commerce brands for their logistics needs while Shiprocket created its niche among small and medium businesses and other D2C brands. This deal will help it strengthen its position as the platform for direct commerce brands for after-sales services, including delivery and other software-as-a-sale offerings.
Pickrr, Goel said, will add about 40% extra volume to Shiprocket's total volumes, which after the merger will be about 10 million a month.
“In terms of synergies, Pickrr had gone out for large customers while we went for long tail SMB clients – so it was naturally complementary (to merge). Then there is technology, downstream processes and team members are built accordingly. This deal will help us create the full-stack for direct commerce enablement,” Goel said, explaining the rationale of the acquisition.
While Goel maintained Shiprocket is an aggregator and doesn't see third-party logistics players as rivals, its latest deals come after national delivery firms like Delhivery, Xpressbees and Ecom Express hiked their service fees for aggregators significantly at the same time, as first reported by ET in April.
“At least to me, there is no conflict based on my direct conversion with partners. We have passed on the price hikes to our customers. There is no reason for me to subsidise anything,” he added.
Meanwhile, Shiprocket has also built about 1.5 million sq ft of aggregated warehouse space across the country which it first started building in 2020. “We now have these warehouses in 35 locations through many partners,” Goel said. These units serve about 10-15% of Shiprocket’s total delivery volumes.
While Pickrr is among its major acquisitions, it has closed four other M&As this year including customer data firm Wigzo Tech, B2B logistics company Rocketbox and supply chain management firm Glaucus.
In November, Shiprocket closed a $185 million funding led by Zomato and Temasek valuing it in the range of $900-950 million. Moore Strategic Ventures, 9unicorns, InfoEdge Ventures and March Capital are among its other existing investors.
Besides shipping, Shiprocket also offers technology solutions to retailers and brands to integrate their sites with platforms like Shopify and others along with inventory and order management. Non-delivery services contribute about 20% of Shiprocket’s total revenue now, Goel said.
Zomato and Temasek-backed Shiprocket is also in the final stages of closing its acquisition of the India business of smaller rival Shyplite. ET has seen emails to Shyplite merchants about the transfer of the business to Shiprocket, but the company did not comment on this deal.
As part of the transaction, Pickrr founders — Gaurav Mangla, Ankit Kaushik and Rhitiman Majumder — are getting shares in Shiprocket, while its financial investors are taking a cash exit.
While Shiprocket has acquired around 80% in Pickrr already, the deal is for a 100% stake purchase which will be completed in the next coming months. Pickrr founders together owned close to 40% in the company, as per Tracxn data as of August 31, 2021. IIFL Asset Management and Omidyar Network India are among Pickrr’s institutional investors.
Shiprocket founder and chief executive Saahil Goel said the Pickrr deal will be complementary to the company's capabilities as the latter was focused on relatively bigger direct commerce brands for their logistics needs while Shiprocket created its niche among small and medium businesses and other D2C brands. This deal will help it strengthen its position as the platform for direct commerce brands for after-sales services, including delivery and other software-as-a-sale offerings.
Pickrr, Goel said, will add about 40% extra volume to Shiprocket's total volumes, which after the merger will be about 10 million a month.
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“In terms of synergies, Pickrr had gone out for large customers while we went for long tail SMB clients – so it was naturally complementary (to merge). Then there is technology, downstream processes and team members are built accordingly. This deal will help us create the full-stack for direct commerce enablement,” Goel said, explaining the rationale of the acquisition.
While Goel maintained Shiprocket is an aggregator and doesn't see third-party logistics players as rivals, its latest deals come after national delivery firms like Delhivery, Xpressbees and Ecom Express hiked their service fees for aggregators significantly at the same time, as first reported by ET in April.
“At least to me, there is no conflict based on my direct conversion with partners. We have passed on the price hikes to our customers. There is no reason for me to subsidise anything,” he added.
Meanwhile, Shiprocket has also built about 1.5 million sq ft of aggregated warehouse space across the country which it first started building in 2020. “We now have these warehouses in 35 locations through many partners,” Goel said. These units serve about 10-15% of Shiprocket’s total delivery volumes.
While Pickrr is among its major acquisitions, it has closed four other M&As this year including customer data firm Wigzo Tech, B2B logistics company Rocketbox and supply chain management firm Glaucus.
In November, Shiprocket closed a $185 million funding led by Zomato and Temasek valuing it in the range of $900-950 million. Moore Strategic Ventures, 9unicorns, InfoEdge Ventures and March Capital are among its other existing investors.
Besides shipping, Shiprocket also offers technology solutions to retailers and brands to integrate their sites with platforms like Shopify and others along with inventory and order management. Non-delivery services contribute about 20% of Shiprocket’s total revenue now, Goel said.
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