Shiprocket-acquired Pickrr to achieve Ebitda breakeven in 6-8 months

Pickrr, the logistics solution company that was acquired by Shiprocket, will reach Ebitda break-even in the next six to eight months, its co-founder and chief executive Gaurav Mangla told FE.

On June 15, Shiprocket, the tech-enabled shipping and fulfilment platform, bought 80% stake in Pickrr for $200 million while Mangla said the remaining will be purchased for another $20-40 million over the next two years — pegging the total deal value anywhere between $220-240 million.

“About 3-4% of our gross margin was getting depleted because Pickrr and Shiprocket were chasing the same set of customers and it made sense to go through with the acquisition deal. Now, we are targeting almost a breakeven kind of an Ebitda (earnings before interest, taxes, depreciation and amortisation) in the next six to eight months. At the core level we are already Ebita positive but we’re Ebita negative mainly on the growth vertical,” Mangla said.

As part of the expansion plans, the combined entity – which currently services about 10 million orders per month – plans to fulfil 30 million order every month, with Pickrr accounting for just under a third of that total number, by March 2023.

Two of Pickrr’s main divisions are its core business and the warehousing vertical. Its core business is where sellers can directly ship through one of Pickrr’s partner firms like Blue Dart, Delhivery, FedEx, others. On the other hand, Pickrr also owns 13 warehouses which lets sellers stock their goods closer to customers and complete orders faster.

The combined entity presently has about 33 warehouses, including Shiprocket’s existing 20 warehouses, and by the end of this fiscal year (FY) that number will more than double to a total of 70, Mangla added.

That increased presence will help the company to deliver about 70% of its total orders within 24-48 hours, up from roughly 60% orders that it currently fulfils in those hours.

Now that Pickrr’s acquisition is done with, Shiprocket might even toy with the idea of acquiring more companies over the coming years.

“There are plans to bring two or three more key companies onboard, the deal quantum would not be that significant but the value add from them will be much higher,” said Pickrr’s Mangla.

Shiprocket would look at companies that have expertise on the warehousing side, ones that solve for the offline brands and firms that have mastered the return-refund side. There are however chances that the acquisitions may not even materialise and the company chooses to build the develop these in-house, he concluded.