Companies

Rate hike by logistic companies does not impact business: Shiprocket CEO 

Yatti Soni | | Updated on: May 20, 2022
Saahil Goel, co-founder and CEO of Shiprocket

Saahil Goel, co-founder and CEO of Shiprocket

Shiprocket plans to double revenue in the coming year

Bengaluru, May 20 CEO of Zomato-backed Shiprocket, Saahil Goel has denied reports of a tussle between the company and logistic companies like Delhivery, XpressBees and Ecom Express. 

Earlier this month, the 30-40 per cent hike in shipment rates by logistic companies was reported to have created tension between them and aggregators like Shiprocket. However, Goel told BusinessLine that logistic companies raise prices every year and even though the price hike was a bit more this year, these new prices do not affect Shiprocket as a business.

“Logistic companies also have to show more margins, so they increased the prices slightly more this year and we passed these prices to our merchant base. As an aggregator platform, we let the merchant choose which supplier they want to work with,” he said. Shiprocket works with multiple suppliers including Dunzo, and Zomato on the local front, national players such as Delhivery, Ecomm Express, DTC, and international logistic companies such as FedEx and DHL.

“We continue to be very close partners with logistic companies and continue to talk to them every week. Nothing has changed in the relationship,” Goel added. In addition to shipping, Shiprocket is also helping merchants with payments, warehousing, reducing return to origin (RTO), among other things.

While Goel did not share the exact revenue numbers, he said that the company is doing more than $100 million in revenue and plans to double this number in the coming year. Shiprocket’s core business of shipping technology continues to be profitable and on the overall level as well, the company is close to EBITDA positive. Last year, the company signed definitive agreements for a $185 million Series E funding round co-led by Zomato Ltd, Temasek and Lightrock India. Overall, Shiprocket has raised a total of $280 million across multiple funding rounds.

On-boarding Zomato

Talking about the reason behind on-boarding Zomato as an investor, Goel said the decision was led by two factors, firstly having access to an entrepreneur like Zomato CEO Deepinder Goyal. The second reason was Shiprocket’s belief in the need for fast commerce or same-day deliveries, which is said to be a big need for Shiprocket’s merchants.  “It is a big need because Amazon is doing same-day deliveries and independent merchants are not. This meant Shiprocket is not able to do its job right as an e-commerce enabler,” said Goel.

Two years ago, Shiprocket started working towards solving this and realised there is something missing in the supply chain. This search led Shiprocket to partner with Zomato along with raising funding from the food delivery major. “We asked Zomato, you have trust in your food delivery business, why can you not power same day delivery for us. And somehow that conversation eventually transpired into the funding round,” he added.

Published on May 20, 2022
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