23 October, 2023
When Saahil Goel decided to quit his tech job in the United States and return to India in 2011-12, he knew he wanted to bring his learnings to the Indian market to help small- and medium-sized businesses with the various pain points they were facing on the tech front. It was also the time when India’s e-commerce market was just taking off and online payments, shipping, and logistics were conundrums that companies were trying to solve. Goel got together with fellow co-founder Gautam Kapoor and the duo started the online platform Kartrocket. They noticed that there was a raw opportunity in India which hadn’t really been tapped.
Saahil Goel, Gautam Kapoor, Vishesh Khurana and Akshay Ghulati started Shiprocket in2017
“Our belief was that in the long-term, India would need tools for MSMEs to do well, and there was nothing available at the time,” says 39-year-old Goel, the CEO and co-founder of Shiprocket. They were later joined by other co-founders Vishesh Khurana and Akshay Ghulati, with shipping becoming a flagship product offering in 2017–and that’s how Shiprocket came to be.
Today, the company has evolved from offering just shipping services to becoming an end-to-end e-commerce enablement platform. It is poised to tap into the growth of India’s burgeoning e-commerce market, and more specifically direct commerce, where Shiprocket is firmly positioned. So far, Shiprocket has enabled over 2.5 lakh merchants nationwide and clocked 20 crore transactions every year. It also entered the unicorn club in 2022 when it raised US$33 million in a Series E round from investors such as Temasek and Lighthouse Funds, along with previous investors such as PayPal Ventures, Zomato among others. So far, the company has raised about six rounds of funding, totalling about US$260 million, the most recent being by McKinsey for about US$11 million.
From connecting small-scale sellers, including artisans from around the country, to ensuring a smooth post-purchase process for merchants, Shiprocket is hoping to make big strides in India’s direct and e-commerce sector.
Edited excerpts from the conversation with Goel:
In 2017, we pivoted to becoming Shiprocket [from Kartrocket]. Since then, we’ve gone through several growth cycles, having ventured into warehousing, payments, and a whole suite of layered tech components. We started asking ourselves, how do we take the playbook for shipping, which we had built successfully, and apply that across the transactional journey of a merchant? Whether it’s a brand doing 500 or 100,000 orders a month, their needs are the same. We’re catering to the small- and medium-sized businesses in the D2C space to further their reach across the country.
The simplest way to put it is that we come into the picture during the post-purchase journey for merchants. We bring everything under one dashboard that merchants can easily consume—from payment gateways to warehousing, logistics and more. So, as a seller, you can choose how you want your shipping and payments to be streamlined. We enable access to the best-in-class technology for entrepreneurs and sellers across India so they can compete with the larger marketplaces. Categories such as beauty and personal care are big for us, so are apparel and accessories, home, fitness, wellness and the like. Shipping continues to be the biggest segment for us, making up a chunk of our revenues.
"Whether it’s a brand doing 500 or 100,000 orders a month, their needs are the same. We’re catering to the small- and medium-sized businesses in the D2C space to further their reach across the country," says Goel
"Perhaps the biggest learning was having the conviction to stick to the segment we were operating in. It took us 6-7 years of pivoting before being able to scale up," Goel adds
Retail penetration in India is still relatively low but is growing quickly. The unstructured, direct commerce sector is where we are positioned. This segment was barely 1-2 per cent of the entire e-commerce market and it is now nearly 10-15 per cent, which shows the potential here. We work heavily with digital native and D2C brands—that’s where our focus is.
Perhaps the biggest learning was having the conviction to stick to the segment we were operating in. It took us 6-7 years of pivoting before being able to scale up. Having said that, we were also blessed to have a good set of advisors and board members who believed in our vision. Typically, you build a product and try different segments. But we did the opposite—we kept the segment the same but thought to keep trying different products, because we believed small- and medium-sized businesses is where the force of growth in India is going to come from.
"We want to be synonymous with direct commerce. Anyone doing anything outside of the big marketplaces should be using one of our products—that’s the goal," says Goel
ONDC’s mission is very closely aligned with ours. It’s fruitful to work together as we are trying to solve the same problem. What UPI did for payments, ONDC has the potential to do for commerce.
The core business turned profitable in 2019. We’ve made several acquisitions over the years and investments have gone into driving these synergies. Exports are a big focus for us as well and could make up around 15-20 per cent of the business. Overall, we’re growing at about 60-70 per cent year-on-year and want to maintain this growth rate.
We want to be synonymous with direct commerce. Anyone doing anything outside of the big marketplaces should be using one of our products—that’s the goal. We’ve grown to become much more than just a shipping platform. Our aspiration was always to help entrepreneurs in their e-commerce journey; shipping just happened to be the way to do it. The goal now is to focus on value creation.