Shiprocket Considers Investment From Koch, Tribe As Part Of Larger Fundraising

The investment, led by Tribe Capital and U.S.-based Koch Group, is aimed at acquiring a significant minority stake in Shiprocket. The stake will be a mix of primary and secondary share purchases, these people said.

“The round that started in April is now coming to an end,” one of the people quoted said.

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Shiprocket, Tribe and Koch did not immediately respond. MintRequest for comment.

Around the world, investors are increasingly turning their attention to India, hoping to take advantage of the country’s promising investment prospects. Mint reported that companies such as London-based Pantheon Ventures and US-based HarbourVest Partners have expressed their intention to increase their investment activities in India.

Shiprocket’s funding path

With Zomato’s backing, Shiprocket made headlines two years ago when it joined the coveted unicorn club after raising $32 million in a funding round led by Temasek and Lightrock.

Last year, it raised an additional $11 million in an expanded Series E funding round from McKinsey. The company has raised about $350 million to date from a variety of investors, including Moore Strategic Ventures, PayPal and Bertelsmann, the largest institutional shareholder, according to data provider Tracxn.

In the current investment landscape, where companies are either matching or losing their previous valuations, Shiprocket’s steady valuation is noteworthy. Despite a glut of dry powder among investors, valuations have yet to return to their 2021 highs. Investors are increasingly favoring companies that have managed to reduce high burn rates and move toward profitability.

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“While Shiprocket seems to have many plans to scale up, it has not managed to reduce consumption that much,” said another person quoted above.

The company’s losses rose to ₹341 crore in fiscal year 2023 from ₹93.1 crore in fiscal 2022 despite an increase in operating income to ₹1089 crores from ₹611 crore in the previous year.

Large deals in growth and late-stage companies like Shiprocket are taking longer to close as the era of cheap capital fades. Investors are more cautious, conducting thorough due diligence in an uncertain macro environment.

Expansion Plans

In April, the company’s managing director and CEO Saahil Goel told Mint that Shiprocket plans to expand through acquisitions in marketing, advertising tools, conversion and data platforms, and customer experience enhancements. Over the past two years, the company has acquired five companies — Glaucus Supply Chain Solutions, Wigzo, Pickrr, Omuni, and Rocketbox — to diversify and strengthen its service offerings.

More here | Shiprocket returns to its favorite accelerator: acquisitions

In May Mint reported that delivery companies like Shiprocket are poised to benefit as a growing portion of their revenue now comes from second-tier cities and beyond, where online shopping is gaining popularity. To capitalize on this trend, many of these companies are working to shorten delivery times and expand their presence, seeking to be closer to customers in these emerging markets.

While shipping remains Shiprocket’s core business, accounting for 80% of its revenue, the company is actively expanding its product offerings. Newer offerings like Cross Border, which simplifies global shipping for sellers on platforms like Amazon and eBay, and Shiprocket Checkout, which streamlines the checkout process for smaller brands, are key to the company’s growth strategy.

According to Goel, the company will focus more intensively on these areas next year, although it is still prepared to achieve profitability if needed.

Founded in 2017 by Gautam Kapoor, Goel and Vishesh Khurana, Shiprocket has grown into a key player in the logistics space, servicing multiple direct-to-consumer brands.

Despite the challenges of high capital burn and a cautious investment environment, the company is positioning itself for sustainable growth through strategic acquisitions and a diversified product offering.

Read also | Saahil Goel from Shiprocket: Supplier

As Shiprocket continues to navigate the changing logistics landscape, its ability to adapt and expand will be critical to maintaining investor interest and achieving long-term success.