2024-10-23 13:06:46 :
Logistics aggregator Shiprocket is looking to increase investment in its emerging business, which contributes a fifth of total revenue, an executive said, as it prepares to post its first full-year profit at an adjusted Ebitda level.
The Temasek-backed company, valued at more than $1 billion, will double down on three areas including cross-border shipping, checkout and fast delivery to drive the next phase of growth, having already seen the first two areas Shiprocket Managing Director Manager and CEO Saahil Goel said in an interview that several quarters of this fiscal year have been profitable on an adjusted Ebitda basis. Mint.
For companies, adjusted Ebitda is earnings before interest, depreciation and taxes, adjusted for employee stock option (Esop) expenses.
“Our core business is already profitable and we will continue to reinvest profits in emerging verticals. These businesses, which were small a few years ago, now account for one-fifth of the total revenue,” Goel said.
Also read: Saahil Goel of Shiprocket: Delivery Man
Launched in 2017, Shiprocket aggregates third-party logistics players such as Delhivery, FedEx, Blue Dart and Shadowfax to fulfill orders from large enterprises and SMEs. It has so far raised more than $233 million from the likes of Temasek, Lightrock, Bertelsmann and listed food delivery company Zomato.
It joined the coveted unicorn club in 2022 after raising $32 million. Last year, it secured an additional $11 million in funding from McKinsey in an extended Series E round. An investment arm of Koch Industries, the second-largest privately held U.S. conglomerate, is seeking to acquire a minority stake in Shiprocket, Mint Reported in August.
Our cross-border business and checkout business are growing at double-digit to triple-digit rates. So those are clearly the ones attracting the most internal investment.
Shiprocket launched its cross-border service Shiprocket X two years ago to facilitate shipping to more than 220 countries, including the United States, Australia and Germany. Shiprocket Smart Checkout was launched to provide direct-to-consumer brands with services such as payment gateway integration and fast order checkout solutions.
Goel said emerging businesses are growing at 70-100% year-on-year, and the fastest-growing vertical industries will attract the highest investments.
“Our cross-border business and our checkout business are growing at a double-digit to triple-digit rate. So those are obviously the ones attracting the most internal investment. We are trying a bunch of other zero-to-one initiatives. But right now, those two Companies are capturing a majority of the market share and naturally also getting some capital,” Goel noted.
Fiscal Year 2024 Results
Shiprocket’s revenue for the fiscal year ending March 2024 increased 21% year over year to $1,316 Crore, loss Rs. $595 crore, mainly due to one-time restructuring and integration charges $244 crore related to the business it acquired. It also incurs substantial ESOP costs $Revenue during the year was Rs 1.92 billion.
However, Goel said the company had cut its cash burn by half $100 crore in FY24, which is attributed to a certain degree of cost optimization and growth in core business, helping the company achieve full profitability by the end of the financial year.
Also read: Profitability: A new benchmark for startups seeking investor recognition
The company completed the acquisition of 100% of e-commerce logistics provider Pickrr for US$200 million between June 2022 and June 2024. This is the largest and most expensive acquisition to date.
Shiprocket’s Goel said the company will continue to look for acquisition opportunities. “As the core business continues to make significant money, we will identify organic and inorganic opportunities that are a good fit as an extension of our capabilities and a cultural fit. Our corporate development team is constantly looking for opportunities to further serve our 1.5 paying customers. ” added Goel.
The company competes with other logistics aggregators such as ClickPost, Shipyaari and EasyShip.
Shiprocket launched Quick earlier this year to provide same-day delivery services to e-commerce companies, starting from Delhi-NCR. Goel declined to comment on the specific performance of the vertical but said it is being continuously monitored to understand its popularity and how it can be scaled up.
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