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Samara Capital, Xponentia Fund Partner To Acquire Spoton Logistics

Samara Capital, Xponentia Fund Partner To Acquire Spoton Logistics

Post-acquisition, the existing Spoton leadership team will continue to drive and execute the next phase of Spoton’s growth strategy

Acquisition is speculated to be done for $78.48 Mn

Spoton plans to reach annualised revenue of INR 1500 Cr in next five years, from present INR 600 Cr

Bengaluru-based logistics provider Spoton has announced its acquisition by a consortium of investors led by Samara Capital and Xponentia Fund Partners to invest into and build out the next stage of growth.

Post-acquisition, the existing Spoton leadership team will continue to drive and execute the next phase of Spoton’s growth strategy, working closely with the Samara and Xponentia Teams.

Edelweiss was the exclusive financial advisor to the seller and the company for this deal. Reportedly the acquisition was done for $78.48 Mn (INR 550 Cr) to support Samara’s plans to team up Amazon and Goldman Sachs to try to acquire More, the country’s fourth-largest supermarket operator.

Founded in January 2012, Spoton, established after PE firm India Equity Partners acquired the road express business of multinational company TNT, provides express logistics to over 4000 corporate and SME customers across industries.

It fulfils express logistics, business to business, serving clients across Hi-Tech, Automotive, Engineering, Pharmaceutical, Electronics, Electrical, Lifestyle and Retail industry segments aided by technology engineered, data-led network.

Abhik Mitra, MD and CEO, Spoton Logistics, said, “We are delighted to have the new investor group on board in the next phase of our journey towards excellence and leadership. Their support for strong management teams to run the company, whilst playing a key role as a value-added partner focused on business strategy, internal controls, governance, financial management, and identifying and supporting growth opportunities, through business alliances and or M&A, will bring rich rewards to all.”

Spoton claims to grow aggressively in the road express business and aims to be the fastest growing player in this segment. Spoton has about 4,000 clients including Reliance, Bosch and ecommerce companies Flipkart and Amazon.

Additional service offerings such as air express cargo, third-party logistics (3PL) and speed trucking are also on the cards and detailed plans are being drawn up along with the Samara team. Domestic air express will be the first new product to be launched and this should be completed by Q4 FY19.

“The Spoton Leadership team has done a fantastic job in building a defensible and profitable proposition in the opportunity-rich logistics sector, which is seeing and will continue to see the tailwinds due to GST, e-way bill and other initiatives. Spoton’s success has been driven by strong corporate governance, an outstanding management team, supported by a Pan India network covering 20000 plus pin codes which is driven by global quality network engineering, led by technology and analytics. We look forward to partnering with them for an equally exciting second inning,” said Abhishek Kabra, Director of Samara Capital.

Aided by the new investor group’s global network, Spoton also plans to explore business alliances with leading global logistics players to boost revenue and growth opportunities for the company. Spoton claims to record INR 600 Cr of Annualised revenue and aims to take it to INR 1500 Cr in next five years.

Devinjit Singh, Managing Partner at Xponentia said, “We are excited to be part of Spoton’s journey to becoming a leading logistics company in India. Abhik is leading an entrepreneurial management team that has leveraged technology to build scale and provide great customer service. As the introduction of GST transforms the logistics industry in India, working with Samara and the management team, we see exciting possibilities to build SpotOn into a great company.”

The companies claim that Spoton’s customers will benefit, as the company aggressively continues to expand its network, add new products and continue to deliver operational and service delivery excellence.

Samara plans to close its third fund of $550 Mn by the end of this year. Samara, which has already raised two funds worth around $700 Mn since its launch in 2007, is expected to use 70% of the proposed fund for buyout or control transactions.

Logistics Industry In India

Other startups in the logistics include ecommerce logistics startup Delhivery, Bengaluru-based Locus, Ahmedabad-based logistic IoT startup Locanix; Pune-based logistics startup XpressBees amongst others.

According to a report by investment bank Avendus Capital, the logistics tech market is expected to surge to $9.6 Bn by 2020.

Poised to touch $307 Bn by 2020, the Indian logistics sector has been witnessing increasing investments and competition. Inc42 DataLabs revealed that the sector recorded 27 deals worth $475.83 Mn in 2017.

In Q1 2018, the sector witnessed 3 deals worth $70.3 Mn according to Inc42 Tech Startup Funding Report Q1 2018.