Pigeon takes logisitics company GoJavas under its wings

By Athira Nair|13th Aug 2016
Clap Icon0 claps
  • +0
    Clap Icon
Share on
close
Clap Icon0 claps
  • +0
    Clap Icon
Share on
close
Share on
close

After months of rumours on its acquisition by online marketplace Snapdeal, logistics player GoJavas has found a better deal for itself. Bengaluru-based Pigeon Express has acquired Gurgaon-based Gojavas, as reported by Business World. The report has stated that a “majority of GoJavas employees have been asked to leave and the company will be shutting down all the operations in due course.” YourStory has confirmed the news with sources close to the development. Financial details of the transaction, however, have not been disclosed. Delhi-based Trackon Couriers was also reported to have been in talks with GoJavas earlier.

Acquisition_2

Now, with Gojavas in its nest, Pigeon – which is a traditional courier service provider - will have the advantage of being able to serve e-commerce logistics. Currently, Snapdeal has around 40-percent stake in GoJavas, which it had announced that they will not sell. By keeping that stake, there is an obvious advantage for Snapdeal: equity in Pigeon Express.

Javas (now GoJavas) started as the logistics arm of Jabong’s B2C entity Xerion Retail, but was later transferred to Quickdel in 2013. Snapdeal had invested $20 million in GoJavas last year to compete against Flipkart, which has its own logistics arm, Ekart, and Amazon’s Transportation Services Private Limited. Snapdeal has also launched its own logistics arm, Vulcan Express.

In fact, industry observers had speculated that GoJavas will merge with Vulcan. But a recent investigation by PwC that Rocket Internet had commissioned – named Project Flush – focussed on how GoJavas was created and changed the course of these discussions.

GoJavas was rumoured to have stopped its deliveries since Jabong was acquired by Flipkart-owned Myntra for $70 million last month. The three-year-old logistics player was dependent on Jabong and Snapdeal for its survival, despite experts agreeing to be exceptional in terms of business model and customer experience. Snapdeal had lost to its arch rival Flipkart on Jabong too. It was a surprise for the industry when Myntra acquired Jabong, when it was Snapdeal, along with Future Group, Reliance Industries, and Aditya Birla that were rumoured to be in talks with them.

GoJavas had not responded to YourStory’s queries on the acquisition till the time of publishing this article.

Want to make your startup journey smooth? YS Education brings a comprehensive Funding Course, where you also get a chance to pitch your business plan to top investors. Click here to know more.