Cross-border shipping, checkout, fast delivery: Shiprocket supercharges emerging businesses

Logistics aggregator Shiprocket aims to increase investment in its emerging businesses, contributing one-fifth of total revenue, as it prepares to record its first full year of profitability at adjusted Ebitda, a top executive said.

The Temasek-backed company, valued at over $1 billion, will double its business across three segments – including cross-border shipping, checkout and fast delivery – to position itself for another level of growth at a time when the first two quarters of the current financial year are already profitable on a adjusted Ebitda, said Saahil Goel, managing director and CEO of Shiprocket, in an interview with Mint.

For a company, Adjusted Ebitda is earnings before interest, depreciation, and taxes, adjusted for employee stock option (Esop) expenses.

“Our core business is already profitable and we continue to reinvest profits in emerging industries. Collectively, these companies, which were very small a few years ago, already generate one-fifth of total revenues,” Goel said.

Read also: Saahil Goel of Shiprocket: Delivery Man

Launched in 2017, Shiprocket brings together third-party logistics players such as Delhivery, FedEx, Blue Dart and Shadowfax to fulfill orders for large corporations and small and medium-sized enterprises. It has so far raised more than $233 million from Temasek, Lightrock, Bertelsmann and publicly traded food supplier Zomato, among others.

It joined the coveted unicorn club in 2022 after raising $32 million. Last year, it raised an additional $11 million from McKinsey in an extended Series E round. The investment unit of Koch Industries, the second largest private business group in the US, intends to buy a minority stake in Shiprocket, Mint reported in August.

Our cross-border business and cash operations are growing by double and triple digits. Of course, they attract the most internal investment.

Two years ago, Shiprocket launched its Shiprocket X cross-border service to facilitate shipping to over 220 countries, including the United States, Australia and Germany. Shiprocket Checkout was implemented to enable brands to directly deliver services such as payment gateway integrations and fast order fulfillment solutions.

According to Goel, emerging companies are growing 70-100% year-on-year, and the fastest-growing industries will attract the most investment.

“Our cross-border business and cash operations are growing by double and even triple digits. Of course, they attract the most internal investment. There are also plenty of other zero-to-one initiatives that we are trying. However, at the moment, these two companies are taking over the majority of the share in the company and automatically also part of the capital,” Goel noted.

FY24 results

Shiprocket’s revenues in the fiscal year ended March 2024 increased 21% year-over-year to ₹1,316 crore, with a loss ₹595 crore mainly due to one-time restructuring and integration expenses ₹244 crore related to acquired businesses. It also incurred significant Aesop costs ₹192 crore in a year.

Goel, however, said the company has cut its cash burn by half ₹100 crore in FY24, attributing it to some cost optimization along with growth in core business, which helped the company achieve full profitability by the end of the current financial year.

Read also: Profitability: a new benchmark for startups seeking investor acceptance

The company has completed the acquisition of 100% of Pickrr, an e-commerce logistics provider, from June 2022 to June 2024 for $200 million, the largest and most costly acquisition in history.

Shiprocket’s Goel said the company will continue to look for acquisition opportunities. “As the core business continues to deliver strong returns, we will find organic and inorganic opportunities that will be suitable as an extension of our capabilities and a cultural fit. Our corporate development team continues to explore opportunities to continue serving our paying customers in version 1.5,” Goel added.

The company competes with other logistics aggregators such as ClickPost, Shipyaari and EasyShip.

Shiprocket launched Quick earlier this year with an aim to facilitate same-day deliveries for e-commerce companies, starting from Delhi-NCR. Goel declined to comment on the specifics of the industry’s performance, but said it is constantly monitored to check its reception and scalability.