drove you into starting a company in logistics?
I am a mechanical engineer from IIT Kanpur
and an MBA from IIM Lucknow. I spent about nine years with McKinsey; I spent a
lot of time on consulting projects. For the last few years I have been really
passionate about solving real problems with a large impact and logistics is one
sector which is really large and which has a lot of deep problems to be solved.
This is one sector where the impact is at all levels, be it people in the
sector or customers as well. It has a direct impact and linkage to the GDP and
the economy. So it looked like one of the sectors which involves very deep
problem solving and has the ability of creating impact at scale. That is what
excited me about logistics more than anything else.
you approached your investors regarding your idea and your business model, how
did they react to it, were they cool with the idea and did they think you could
pull it off?
In the year 2014 there was a lot of
sentiment around mobile apps and asset light models, this is one model which is
more real in the sense that we have assets and there is technology as well. So
it is not completely asset light and is technology driven. In the initial few
months the reaction was like ‘oh show me the app’ or ‘oh you are an asset heavy
company’. So it was not an investor led business but once traction came through
and people saw that the idea was real and is solving a real problem be it a
driver problem or a client service problem, investors were quite smart to
figure which bet to take. This was only for the first few months and after that
there has been a lot of heavy industry interest in terms of the idea, the
business and the team itself. This is a testimony to the fact that
entrepreneurship focuses on solving the real problem and once you are doing
that the investor and the capital will come itself.
describe your present business model and
where it has arrived at present.
We started in 2014 with a simple idea and
thesis of solving the truck driver problem by doing driver relays. It has come
out quite well since then as it has scaled to a pan India operations and a
large set of trucks run every day on a driver relay model. It has changed the
industry paradigm on service levels, turnaround time and predictability. This
service was not at all available earlier. From here on our journey is to make
it even more relevant and have more and more clients shift to this kind of a
service. Customers can design their supply chains based on reliability, service
levels and predictability which they get from this service. I think that is
what the next journey is going to be. Even when we started this idea, this is
the first time any one is doing such a thing globally and therefore it was
never proven, we did not know whether it will work or whether we will get
client or customer interest. We did not know how the overall ecosystem was but
sitting here after 18 months I feel that we have come a long way in terms of
establishing the design work which benefits everyone be it the ecosystem
providers, the drivers or the customers. Therefore it is now bound to grow and
become the mainstream way of running logistics.
kind of trucks are you running right now and also how are you managing the
trucker’s pool which you have right now?
The model itself is driver centric. The
driver relay happens and the drivers come back on the same day. It solves the
whole problem of driver lifestyle, harassment and that is the core area of this
model. Therefore it directly impacts the reasons why there is a lack of
drivers. We have stops where the drivers are available and we source drivers
from the local areas, then they are engaged through a central and pit stop
team. We have two models of trucks -- one is a large 25 tonner and the other is
an Ashok Leyland Boss.
you running a telematics solution to evaluate drivers?
entire operations are fully enabled by technology and that is the cornerstone
of our business. A lot of technology goes into the trucks and the drivers. There
is a central technology which tracks the trucks and the shipments as well. All
of this helps making the operations more efficient, be it theft control,
pilferage control, asset control, reliability management and safety. We have
infused technology to the extent that the entire operation gets seamlessly
managed through automation rather than paper work and people.
you running some kind of a driver training programme as well?
All our drivers get trained before they
take the wheel, they get trained from different driver training institutes. We
have tied up with different market enablers and there are five locations where
we run this training. It is a three-day residential training program and a lot
of training in these sessions is on mindset, behavior, cultural and discipline
issues than on truck driving per say. Other focus areas are on safety and how
to improve mileage.
were the initial challenges that you faced and how did you overcome those
The challenges were quite a lot, it started
from the fact that no one wanted to do trucking or logistics and the high
quality talent typically wanted to join more consumer businesses than B2B
trucking businesses. So getting exceptional people excited about this space was
one of the biggest challenges early on and building a high quality team was
also a challenge. We were new to the sector and none of us has a logistics or
trucking background, so learning from day one and applying fresh perspective to
what happened in the sector was again a journey in itself. Whether it was
sourcing drivers or how do you identify if the driver will work in a
disciplined and responsible way. There are horror stories which we used to hear
early on like pilferage, theft and irresponsible behavior. So how do we counter
that and that has been a learning itself, now we have seamlessly been able to
hire 200 drivers across the country. We hire them, engage them and train them.
It has been a journey in itself to learn the entire driver engagement case.
There have been operational issues as well
like managing the pilferage of fuel. So how do you ensure, in the relay that if
the accountability is not there with one particular driver pilferage does not
take place. Over a period of time we have solved these with technology and
processes. We use sensors and get data from that which we can track. We have
also implemented design changes as well to the vehicle which ensure that there
is no leakage of fuel and if there is then we can spot it. But any change which
you bring cannot be technology alone, you have to inspire people and set
processes to identify the leakage, you have to then enable it using technology
and tell a story on why it matters. I think it takes time and a lot of effort
at a ground level to get such a thing executed. It does not happen overnight as
it is a continuous challenge. We still want to improve our fuel mileage and
driver engagement, we still want to enhance turnaround time and minimise
unscheduled stops. We have come a long way but a lot more needs to be done in
many rounds of funding have taken place, the last round of funding was in
December last year and what is the way forward?
Three rounds of funding have taken place so
far. The first was an Angel round, then a Series A round with SAIF and a Series
B round with SAIF as well. The last funding happened in December so we are not
looking for funding right now but at an opportune time when we scale up
business further we will go to the market again to raise capital. The project
and the idea itself were very audacious. It will require the entire ecosystem
to come together in the right way and I see Rivigo as a champion of this idea
but it benefits the entire ecosystem, it benefits the truck OEMs and the
drivers. It creates driver pool and safer road operations, it benefits
customers as well. Since we are spearheading this we need to contribute more by
putting in more capital, talent and resources to ensure it becomes mainstream.
you planning to procure more vehicles, expand and diversify in the coming few
We are continuously buying vehicles and
over the last year we have bought a certain number of vehicles and we will
continue to buy more as the business grows. We are also enabling our partners
to buy vehicles and they include mostly for regional hauls, first mile and last
mile operations. So we are already scaling up our cold chain and part load
business, both of which have been started only in the last six months and there
is a lot of agenda to be executed. We are not looking at any more
diversification right now but we are just streamlining what we have currently
and scaling up what we launched over the last six months.
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