SUMMARY
Swiss private equity firm Partners Group is investing in Ecom Express in a deal that could see existing investor Warburg Pincus make a near-total exit
Partners Group will also be adding up to $40 Mn as a fresh infusion into Ecom Express
The mega deal would see the logistics tech startup inch closer to the unicorn club
Delhi-based logistics tech startup Ecom Express is close to raising over $260 Mn from Swiss private equity firm Partners Group in a deal that could see existing investor Warburg Pincus make a near-total exit, according to sources close to the development.
While a report in ET earlier in the day said that the company is raising the capital through a fresh infusion as well as in exchange for nearly 40% of Warburg Pincus’ stake in Ecom Express, sources told Inc42 that Partners Group is actually buying 70% of Warburg Pincus’ stake, which is almost a full exit.
Partners Group is expected to sell up to half of the purchased equity to other investors in subsequent transactions, according to one source. In addition, the PE firm would be pouring in $40 Mn as a fresh infusion into Ecom Express.
In September 2017, Ecom Express had raised over $50 Mn from investors such as Warburg Pincus and others. Then last year, the end-to-end logistics solutions provider raised $36 Mn (INR 255 Cr) in equity funding from the UK development finance institution CDC Group.
At the time, cofounder TA Krishnan had said the objective was to utilise the funding to expand the delivery footprint in connecting towns and rural centres across India, invest in technology, strengthen network reliability and infrastructure. Ecom Express claims to have a reach in over 2,650 towns across more than 27,000 postal codes in India, with over 2932 fulfilment centres.
Ecom Express did not directly respond to independent inquiries from Inc42 on the funding round.
Founded in 2012 by TA Krishnan, Manju Dhawan, K Satyanarayana and Sanjeev Saxena, Ecom Express provides end-to-end logistics solutions and facilitates first-mile pickup, processing, network optimisation and last-mile delivery. In FY19, Ecom Express reported a 76% increase in its revenue reaching INR 1018.45 Cr, with losses reduced to INR 129.60 Cr from INR 526.7 Cr in FY18.
With this funding round, the company would be inching close to the unicorn club, joining Blackbuck, Delhivery and Rivigo from the logistics tech sector.
Over the past year, logistics tech startups have not only had to rewrite some of their models because of the pandemic and the lockdown, but also had to reorient themselves for hyperlocal-focussed operations as D2C brands came to the fore. This has changed the shape of logistics tech in India and is reviving new innovation in this sector. The past couple of months have seen logistics tech startups attract VC interest across stages.
This week, Steadview Capital came on board as an investor in logistics tech unicorn Delhivery. The Delhi-based startup raised the funds through the sale of secondary shares, which saw Steadview purchase $25M worth of secondary shares from an early investor in the company. Similarly in November, Pune-headquartered Xpressbees raised $110 Mn from Investcorp, Norwest Venture Partners and Gaja Capital, at a valuation of over $400 Mn.
