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Alibaba In Talks To Invest In Delhivery And Xpressbees To Build Logistics Arm In India

Alibaba In Talks To Invest In Delhivery And Xpressbees To Build Logistics Arm In India

Paytm and Snapdeal investor Alibaba is all set to join the last piece of puzzle. In a bid to build what Jack Ma called as ‘iron triangle’, it is now betting on Indian logistics service providers. As per ET, it is looking to buy or invest in Delhivery and Xpressbees Logistics in next 4 – 6 months.

There are also plans to spin off Paytm’s marketplace business and top it up with more capital. Alibaba and its affiliate Ant Financial together own about a 40% stake in the company. Recently, GoJavas and Ecom Express have also shown interest in Alibaba’s India entry to clinch a partnership.

“We are absolutely committed to developing in this market for the long term,” said Alibaba in a statement. Alibaba is looking to launch its ecommerce business in India this year, to compete with players like Flipkart and Amazon.

Top executives from Delhivery and XpressBees have met the team which Alibaba has set up for the India entry. This group is led by Alibaba’s Global Managing Director K Guru Gowrappan and Bharati Balakrishnan.

“They are putting their strategy in place. Fundamentally, they will buy and start with Paytm’s online retail business, because a deal with Flipkart is not happening right now as they feel it is very expensive. They will get a logistics partner to build a network like Amazon, which is very critical,” said a source who briefed about Alibaba’s plan to ET.

Gurgaon-based Delhivery was launched in 2011 by Mohit Tandon, Sahil Barua, Bhavesh Manglani, Kapil Bharati and Suraj Saharan. The company was valued at INR $297 Mn during its $85 Mn Series D funding round. It is backed by investors such as Tiger Global management, Nexus Venture Partners, and Times Internet.

Xpressbees, on the other hand, grabbed a $12.5 Mn Series A investment from existing investors SAIF Partners, IDG Ventures, Vertex Ventures and Valiant Capital. It was founded in September 2015 by Amitava Saha and Supam Maheshwari and is based in Bangalore. The company clocks over 100,000 shipments daily.

Both companies work with Paytm as third-party logistics and eKYC partners.

Alibaba is trying to enter in India at a time when there is a lot of negative air floating taking investors sentiments to a low scale. Also, with amazon already lost its battle in China, is now looking aggressively to $10 Bn market of India and plans to infuse more than $3 Bn to take on its rivals.