Bengaluru: Rivigo Services Pvt. Ltd, India’s most valuable logistics start-up, is in talks to raise a large round of funds from new and existing investors as it seeks to expand its trucking fleet and add new clients, three people familiar with the matter said.

Rivigo could raise $350-400 million, the people cited above said, on condition of anonymity. The talks are at an early stage and the amount of capital it eventually raises could differ when the deal is done, they said. Rivigo is seeking a sharp jump in valuation from the $950 million it was valued at in the previous round, the people said.

Rivigo has so far raised nearly $170 million in equity and debt from SAIF Partners, Warburg Pincus, Trifecta Capital and others, according to Tracxn data. It received $50 million last December in a Series D round from SAIF and Warburg. Rivigo didn’t respond to an email seeking comment.

Started in 2014 by former McKinsey consultants Deepak Garg and Gazal Kalra, the Gurugram-based start-up deploys a so-called driver relay model to deliver products for companies in e-commerce, retail, auto, fast moving consumer goods and other sectors. Under this model, several truck drivers are used to deliver a single shipment. A truck driver takes the shipment from one designated point to another within a few hours, “relays" the truck to another driver and drives back to his starting point in another truck. This way, Rivigo offers less abnormal working hours for truck drivers, who otherwise have terrible working conditions.

The relay model makes Rivigo a relatively attractive workplace for truck drivers in a sector where firms typically find it tough to find and retain drivers. Unlike aggregators who only connect customers with truck operators, Rivigo has its own fleet of trucks. It entails more investment but it also gives Rivigo control over the delivery process and consistent and faster deliveries. It claims to reduce delivery time by 50-70% for customers.

Rivigo competes with Gati, Blackbuck and Fortigo. While most of its rivals are well-funded, its latest proposed round will give Rivigo significant firepower to add thousands of trucks, expand its business and strengthen its relay model.

Still, the firm’s asset-heavy business model is looking difficult to pull off. In the year to March 2017, Rivigo’s annual loss widened to 137.1 crore from a little over 5 crore in the previous year, according to filings sourced from Tofler. Revenue climbed nearly threefold to 401.8 crore from 148.6 crore in the previous year.

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