How A Road Trip And Coffee Created A Billion-Dollar Logistics Startup Rivigo

Logistics startup Rivigo changed the way trucks ply across India with its relay model. The company, India’s latest unicorn, now has 3,000 customers across 20 sectors and aims to expand its footprint.

Gurugram-based logistics startup Rivigo, with its latest round of funding, entered the elite unicorn club. The company raised $65 million from existing investors Warburg Pincus and SAIF Partners. Read more: Why Tech Startups Need Their Trademark Registered

Rivigo was set up in 2014 by Mckinsey consultants Deepak Garg and Gazal with the idea of creating a relay truck model, where no driver would drive for more than four-five hours at a stretch and would return home the same day. 

Deepak had spent close to a decade at McKinsey and was deeply involved in the logistics and automotive sector. During his time there he realized that on one hand, the economy was growing, trucks were not selling in line..This was astonishing given that logistics form the backbone of the economy.  

That is when Deepak decided to take some time off from work, and take a road trip to interact directly with truck drivers and understand the reasons behind the shortage of drivers. 

The exciting coffee meet

While Deepak was playing with the idea of the startup, he met Ghazal over coffee. She was just back from the US after finishing a joint programme - an MBA from the Stanford Graduate School of Business and a master’s in Public Policy from Harvard Kennedy School-

 

Deepak and Gazal had not worked together, but he knew her through her husband, a colleague at McKinsey.

 

In order to get a first-hand idea, Gazal hit the road herself. She wanted to understand why in a country like India, which has a massive unemployment problem, people were not willing to take up a paid job like that of a truck driver.

 

 

Analyzing the situation, the duo realized that there were several reasons why the profession has traditionally been looked down upon, the biggest one owing to drivers staying on the road for days on end. Typically, truck drivers go home three-four times a year.

 

It is perceived to be a high-risk job because of poor living conditions and vulnerability to so many negative situations to drive more and faster. Gazal and Deepak knew that if they could send the driver home same day, a lot of those problems would get automatically solved.

 

The mobile app, the company has built for the drivers also makes life simpler by proving a one-stop solution for all their needs.

After six months of launching the initiative, the co-founders met the drivers’ wives who claimed to be very happy with the change in their husbands’ regimen.

The first customer

There is a rather interesting story about the time Rivigo signed on its first customer. It was for a Delhi-Pune shipment. As per the customer’s system, the distance to be covered (1,350 km) would take 70 hours or three days.

From that first customer, Rivigo has come a long way to a current tally of 3,000 customers across 20 sectors, which include automotive, publishing, apparel, and grocery.

Rivigo 2.0

According to the co-founders, Rivigo is still the only company in the world to have cracked the relay trucking model. The company wants to make the relay trucking model accessible to fleet owners and is running pilots for the same.

 

But why would a pioneer like Rivigo want to share its secret sauce? “It is because we realize that this is becoming an institution and will last beyond our lifetime,” she answers.

The Indian road freight market is estimated to be worth around $150 billion. Rivigo believes that while there is no other company that is in direct competition yet, and their model is one of a kind, it is a large enough market, “with room for multiple players, as there are different problems to solve in the sector”.

The company has its own fleet of 3,000 trucks that cover 29,000 pin codes across the country. It has created a network of over 70 pit stops and 200 branches.

Rivigo has a company-owned fleet of 3,000 trucks

 

 

 

 

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