Cross-border shipping, checkout, quick delivery: Shiprocket supercharges emerging biz
Logistics aggregator Shiprocket is looking to increase investments in its emerging businesses, contributing a fifth of the total revenue, as it gears up to log its first full year of profitability on an adjusted Ebitda level, a top executive said.
The Temasek-backed company, which is valued at over $1 billion, will double down on three segments—cross-border shipping, checkout, and quick deliveries, among others—to fuel its next level of growth, at a time when the first two quarters of the current financial year are already profitable on an adjusted Ebitda basis, Saahil Goel, managing director and chief executive officer of Shiprocket, said in an interview with Mint.
For the firm, adjusted Ebitda is earnings before interest, depreciation and taxes, adjusted for employee stock options (Esop) expenses.
“Our core business is already profitable and we continue to reinvest the profits into the emerging verticals. These businesses together, which used to be very miniscule years ago, already account for a fifth of the total revenue,” Goel said.
Also Read: Saahil Goel of Shiprocket: The delivery guy
Launched in 2017, Shiprocket aggregates third-party logistics players like Delhivery, FedEx, Blue Dart, and Shadowfax to fulfill orders for large corporations and small and medium businesses. To date, it has raised upwards of $233 million from Temasek, Lightrock, Bertelsmann, and listed food delivery player Zomato, among others.
It joined the coveted unicorn club in 2022 after raising $32 million. Last year, it secured an additional $11 million in an extended Series E round from McKinsey. An investment unit of Koch Industries, the second largest privately owned business group in the US, is looking to buy a minority stake in Shiprocket, Mint reported in August.
Our cross-border business and checkout businesses are growing between double and triple digits. So these are obviously attracting the most investment internally.
Shiprocket launched Shiprocket X, its cross-border service, two years ago to facilitate shipping to more than 220 countries, including the US, Australia, and Germany. Shiprocket Checkout was rolled out to enable direct-to-consumer brands with services such as payment gateway integration and quick order checkout solutions.
The emerging businesses are growing 70-100% year-on-year and the fastest-growing verticals will attract the highest investment, according to Goel.
“Our cross-border business and checkout businesses are growing between double and triple digits. So these are obviously attracting the most investment internally. And then there are a bunch of other zero-to-one initiatives that we’re trying. But at the moment, these two businesses are taking in most of the mindshare and automatically some capital as well,” Goel noted.
FY24 performance
Shiprocket’s revenue in the financial year ended March 2024 grew 21% year-on-year to ₹1,316 crore, with a loss of ₹595 crore mainly on account of a one-time restructuring and integration expense of ₹244 crore related to its acquired businesses. It also incurred a significant Esop cost of ₹192 crore during the year.
However, Goel said that the firm cut its cash burn by half to ₹100 crore in FY24, attributing it to some amount of cost optimisation along with growth in its core business, helping the firm achieve full profitability by the end of the current financial year.
Also Read: Profitability: The new benchmark for startups seeking investor approval
The firm completed the acquisition of 100% stake in Pickrr, an e-commerce logistics provider, between June 2022 and June 2024 for $200 million, its biggest and costliest acquisition till date.
Shiprocket’s Goel said the company will continue looking at acquisition opportunities. “As the core business continues making good money, we will find organic and inorganic opportunities that are a good fit as an extension of our capability and a culture match. Our corporate development team is constantly surfacing opportunities to further serve our 1.5 paying customers,” Goel added.
The firm competes with other logistics aggregators like ClickPost, Shipyaari and EasyShip.
Shiprocket launched Quick earlier this year, aiming to facilitate same-day deliveries for e-commerce companies, starting with Delhi-NCR. Goel declined to comment on specifics of the vertical’s performance but said it is being continuously monitored to see its reception and how it can be scaled.
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