Impending divorce: How Shiprocket’s relationship with delivery partners imploded overnight

The new financial year began with a jolt for Shiprocket, a logistics aggregator that wants to be much more. An email with the subject line “Shipping Rates for Delhivery and Xpressbees Couriers Have Been Increased” had gone out to sellers on its platform on April 1, causing much consternation. It was not an April Fools’ joke — the delivery companies had hiked prices by 40% for customers who availed their services through the Shiprocket platform.

Until last year, these companies had a nice arrangement going with Shiprocket and its sellers that was beneficial to all the parties. Shiprocket’s SaaS platform connected sellers with the delivery companies, who ferried their merchandise to consumers across the country. 

Thanks to this facilitative role, Shiprocket has experienced rapid growth over the last six years. It offers a consolidated suite of services to D2C brands and MSMEs, showing them the best logistics option for a particular location based on speed, distance and cost to ship their orders. It allows merchants to negotiate the cheapest price with its logistics partners for delivery to end consumers. The delivery companies benefit from having steady revenue and bulk volumes through Shiprocket, which aggregates orders from its customers by location.

But that cosy arrangement changed when Shiprocket closed its $185 million Series E funding last December, in a round led by food-delivery and restaurant-discovery company Zomato, which put in $75 million.