Mumbai: Five-year-old e-commerce logistics startup, Delhivery may close a $100 million or Rs 670 crore pre-IPO fund raise which has attracted the interest of private equity biggie Carlyle group, China’s Fosun and Goldman Sachs Investment Partners, people familiar with the matter. The Gurgaon-based company, which facilitates the delivery of goods for online retailers like Flipkart and Amazon, is likely to snag a valuation of about $650 million, post the investment comes through, sources said.
The broader logistics technology segment has piqued the interest of private equity players with Warburg Pincus backing Ecom Express and Rivigo, while these investors kept away from the cash-guzzling consumer facing internet startups.
Delhivery will emerge as one among the rare domestic tech-enabled companies, which sprang up during the past few years, as a likely candidate to tap the public markets in the near term.
“The due diligence process is currently underway. It is likely to be Carlyle, Fosun with Tiger Global, its existing investor, also participating. The amount may go up from the present $100 million,” said a person in the know of the developments. Tiger Global holds about 20% in Delhivery while early investor Nexus Venture Partners has an ownership of 25%.
The fresh funds may be used by the company to acquire ventures in the supply chain sector as Delhivery looks to broaden its offerings. The logistics firm fulfilled around 7 million shipments in January, reaching 8,000 pincodes across the country.
The interest in Delhivery comes on the back, China’s ZTO Express, a delivery service which has Alibaba as its largest client, raising $1.4 billion through its IPO in the US.
Sahil Barua, Co-founder & CEO, Delhivery, did not comment on the financing round and emails sent to Carlyle’s India MD Neeraj Bharadwaj and a Fosun spokespersons did not elicit a response.
Delhivery had earlier tried raising fresh capital in 2015, having held talks with Yuri Milner’s DST Global, an investor in Flipkart and Ola, as well as Singapore’s GIC and China’s Hillhouse Capital as TOI had reported, however, those discussion did not result in a financing round. This coincided with the domestic e-commerce market slowing down, affecting Delhivery’s business and financials. The company since then notched up revenues of $120 million as the company invested behind data science, technology and engineering.
Delhivery, Flipkart’s eKart, and Blue Dart together cater to 65% of e-commerce outsourced to last-mile logistics, while Amazon Logistics, commands about 12-14% share of the market, as per industry sources. SSN Logistics, which operates Delhivery, also counts Times Internet, a part of the Times group, which publishes this newspaper, as one its early investors.
A report by investment banking firm Avendus Capital put out last year said that logistics-tech is expected to grow from $1.4 billion to $9.58 billion on the back of strong expansion in online retail market. Funding of tech-backed logistics players totalled close to $318 million as of September 2016 with Delhivery racking up $125 million and E-com Express having received $149 million. Most of these firms operate at gross margins between 8 – 12%.
Source: Times of India
