Marking a major consolidation in the e-commerce enablement industry, Shiprocket has agreed to acquire Pickrr for around $200 million in a mix of cash and stock deal, a top executive told VCCircle.
“What we would have built in a longer period of time, we can now do it quickly with this acquisition. The founders of Pickrr will stay. We have barely scratched the surface and they will continue building along with us,” Saahil Goel, co-founder and chief executive officer of Shiprocket, said in an interaction.
“One of the main advantages of acquiring Pickrr is that their combined data pool will lead to warehouse optimization, consumer intelligence and conversion optimization. This acquisition will also help shipping partners to align strategically and engage more closely with the combined entity to create more value in last mile logistics for the 75,000-merchant base,” Goel added.
Gaurav Mangla, co-founder of Pickrr, said that the company had two more offers apart from Shiprocket’s, one of which was from a private equity fund.
“Taking the PE offer would have meant that the rat race with Shiprocket to chase the same set of customers would have continued, leading to more cash burn and depleting gross margins,” he noted.
Pickrr’s investors, which held around 50% stake in the company, according to a person close to the development, have made handsome returns.
Angel investors of the logistics startup have made more than 100 times and its Series A investors have made more than 20 times. Pickrr’s Series B investors walked home with 4-5 times returns in less than a year, he added.
Founded in 2015 by Mangla, Rhitiman Majumder and Ankit Kaushik, Pickrr raised $12 million in a Series B funding round led by IIFL, Amicus Capital and Ananta Capital in August last year. Existing investors Omidyar Network India and Guild Capital also participated in that round.
For Shiprocket, Pickrr is its fourth acquisition this year. The third-party logistics or 3PL player earlier acquired Glaucus, Rocketbox and Wigzo.
Shiprocket’s Goel said that the company will continue to look at inorganic growth opportunities in the post-purchase category that includes customer services, shipping, packaging, returns and refunds. He added that the company has enough cash reserves without specifying a number and that most of them are reserved for acquisitions.
Goel also sought to dismiss the perception that it is looking to take on the big players of the logistics space such as Delhivery and Xpressbees who are also its partners.
“We are an operating system which means that we build all of this technology which anyone can plug into. Our vision is to partner with people and build this operating system. We ourselves will not get into ground logistics. That is not on the table. When we are working with our 3PL (third party logistics) partners, there is no feeling of competition. Fundamentally, we are two different companies. Just like there is a big difference between being a bank and a payment gateway,” Goel added.
Shiprocket, according to its founders, will not engage in any fund-raising at the moment.
“We have been opportunistic about our fund-raising. If the business requires capital, then we will do it,” Goel said.
In December last year, Shiprocket signed definitive agreements to raise $185 million (Rs 1380 crore) as part of its Series E funding round co-led led by Zomato Ltd, Temasek Holdings and Lightrock India.
Goel did not disclose the latest financials of the company but said that Shiprocket’s core business is profitable. The company clocked a revenue of Rs 364 crore in fiscal 2020-21 from Rs 161 crore in the previous financial year, according to VCCEdge, the data and intelligence platform of VCCircle. It posted a net profit of Rs 12.4 crore during the period as compared to Rs 10 crore during the same period the previous fiscal.
A person close to the development said that the company ended fiscal 2021-22 at a revenue of Rs 625 crore.
Shiprocket had also entered the international market last year with its entry into Saudi Arabia.
“We have launched the first version, just the tech layer for now in Saudi Arabia. It is a small unit but it has got good legs,” said Goel. The company does not plan to enter new regions in the international market this year as it wants to focus on the domestic market.
“We will definitely be a global company in 10 years though,” he added. Notably, the company recently launched cross border offerings to allow people to move goods outside India.