Logistics Startup Delhivery Acquires Dubai's Aramex India Business: Report

SUMMARY

Aramex global financials were impacted after downscaling India ops

Aramex had earlier acquired Mumbai’s Grab.in, and Jaipur’s Logisure

It provides logistics for major ecommerce companies such as Amazon India and

Gurugram-based logistics provider for ecommerce companies, Delhivery, has reportedly acquired the India business of Dubai-based logistics firm Aramex for an undisclosed amount. Delhivery will take over Aramex’s local operations with effect from March 1, 2019.

Aramex provides logistics for major ecommerce companies such as Amazon India. In 2016, the company had invested in online hyperlocal delivery service for restaurants Grab.in; and Jaipur’s intra-city B2B logistics service provider, Logisure.

According to the ET report, citing an email sent by Aramex India country manager Hector Crasto to its customers, Delhivery will now take over Aramex India’s pick-up and delivery shipment operations. However, Aramex will continue to focus on its global competencies of express and freight and will continue the international business in the country, the report said.

Aramex, while announcing its Q4 2018 results, had said that the performance of its domestic express operation was impacted due to downscaling of operations in India. The company reported domestic express operation revenue of AED 270 Mn ($73.5 Mn) in Q4 2018 — a 1% drop compared to AED 272 Mn ($74 Mn) in Q4 2017.

“While Aramex’s domestic express services witnessed excellent growth in GCC and Africa, the overall growth was impacted by the strategic downscaling of the company’s operations in India as part of restructuring efforts… Excluding India operations impact, Domestic Express would have grown by 8% in 2018,” the company said.

On the other hand, Delhivery demonstrated strong growth performance, with a 42% jump in its revenue in FY 2018. Its operational revenue contributed almost 95% to its total revenue of $153.26 Mn (INR 1,073.64 Cr) in the year, as against $107.92 Mn (INR 756 Cr) for the previous year, Inc42 reported.

Delhivery was founded by Mohit Tandon, Sahil Barua, Bhavesh Manglani, Kapil Bharati, and Suraj Saharan in 2011. As of December 2018, the company claimed to be catering its logistics service in more than 600 cities with 12 fulfilment centres for B2C and B2B services.

The startup, which counts Carlyle and Tiger Global as investors, works with ecommerce companies such as Flipkart and Paytm. Speculation was rife earlier that Japan’s SoftBank Vision Fund is reportedly looking to acquire 37.87% stake in Delhivery, and has reportedly sought approval from the Competition Commission of India (CCI).

Logistics is the brain behind the supply chain industry. Over the years, startups in this sector have come up with innovative new technologies with logistics-related software solutions, last-mile delivery, robotics, automation solutions. Indian logistics sector is currently valued at $160 Bn and is poised to hit $215 Bn by 2020.

According to Inc42’s State of The Indian Startup Ecosystem 2018 Report, India had over 900 logistics startups as of November 2018. Between 2014 and 2018, these startups have raised over $1.4 Bn funding across 115 deals.