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Logistics firm GoJavas temporarily suspends operations due to operational changes and technical issues

pigeon express in talks with gojavas for acquisiton
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GoJavas, which recently came into limelight because of a Twitter leak, has temporarily suspended its operations due to a technical snag. A Livemint report revealed the same adding that it is still in talks with Snapdeal for acquisition as it failed to convince any external investors to raise fresh capital.

As far as temporary shutdown is concerned, GoJavas confirmed the report and said in an email statement,

GoJavas is making changes to its operational model to be more flexible and to provide additional services and extra reach. However, we have encountered an IT (information technology) issue, which has hampered this rollout.

We are working 24X7 to resolve this issue and will re-initiate load post thorough testing of our systems. All clients have been informed and are cooperating.

The statement, however, did not reveal anything about the type of operational changes or the expected amount of time required to resume operations. GoJavas has stopped its services since last one week affecting more than 450 companies.

Notably, it has been over a year since the reports of Snapdeal acquiring GoJavas first emerged. The company reportedly holds a 42% share in the logistics firm and was close to acquiring it last month.

However, a recent Twitter leak of an investigation by Rocket Internet into the senior executives of Jabong dragged GoJavas as well. One of the main accused, Jabong co-founder and former CEO Praveen Sinha hold a significant stake in the logistics company. As per the leak, there was a conflict of interest in the GoJavas deal with Snapdeal.

Although Sinha denied these allegations, various media reports suggested that GoJavas apparently walked out of negotiation talks with Snapdeal. The latest report now suggests that Snapdeal could still acquire the logistics firm as it stands to gain a lot.

Snapdeal has been heavily investing and expanding its logistics network. Recently, it opened 6 new logistics hubs under Vulcan Express which is its major fulfilment unit. Interestingly, chief operating officer of Vulcan Express, Vijay Ghadge previously held the same position at GoJavas.

By acquiring GoJavas, Snapdeal could further help in the expansion of its logistics and supply chain network. It will gain a readymade platform which will immensely help the company attain low delivery costs while improving delivery speed at the same time.

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