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CPPIB Invests $115 Mn In Logistics Unicorn Delhivery

CPPIB Invests $115 Mn In Logistics Unicorn Delhivery

CPPIB is speculated to have picked up 8% stake

Delhivery raised $413 Mn from SoftBank in March

The company claims to have fulfilled over 500 Mn transactions

Gurugram-based ecommerce logistics startup Delhivery has raised $115 Mn in fresh funding from the Canada Pension Plan Investment Board (CPPIB). Following this investment, CPPIB will have one seat on Delhivery’s Board.

The companies didn’t highlight the use of the funding, but the investment was speculated to be a secondary market investment picking up 8% stake. CPPIB was speculated to be buying the shares from homegrown private equity firm Multiples Alternate Asset Management.

The company has raised $784 Mn from investors including $413 Mn funding from SoftBank, which valued the company at $1.6 Bn in March this year.

Delhivery: 500 Mn Transactions And More

Delhivery was founded in 2011 by Mohit Tandon, Sahil Barua, Bhavesh Manglani, Kapil Bharati, and Suraj Saharan. It provides a full suite of logistics services such as express parcel transportation, LTL and FTL freight, reverse logistics, cross-border, B2B & B2C warehousing and technology services. The company claims to cater to 17,500 pin-codes and 2,000 cities.

Sahil Barua, Delhivery’s founder and CEO said that the company has fulfilled over 500 Mn transactions. It claims to work with over 10K direct customers, which includes large and small ecommerce participants, SMEs and over 350 leading enterprises and brands.

Barua said, “We are delighted to welcome CPPIB as a new partner for our next phase of growth alongside our existing partners. The company has delivered handsome financial returns and liquidity for our early risk investors, while bringing in an incredible new set of patient partners who will continue to back us on our long-term ambition of becoming the operating system for commerce in India.”

In FY18, the company reported a jump of 42% in its revenue gaining total revenue of $153.26 Mn (INR 1,073.64 Cr). Here, its operational revenue contributed almost 95% to its total revenue as against $107.92 Mn (INR 756 Cr) for the previous year. The company is speculated to be scouting for an initial public offering (IPO) since last year.

Inc42 had recently reported that Delhivery has allotted over 11K ESOP shares to 18 employees under Delhivery employee stock option plan 2012 (as amended on March 8, 2019). Earlier in February, Delhivery acquired the India business of Dubai-based logistics firm Aramex for an undisclosed amount. Delhivery planned to take over Aramex’s local operations with effect from March 1, 2019.

CPPIB And Indian Logistics Industry

“CPPIB has been active on the ground in India for nearly a decade and we continue to pursue opportunities to invest in the country as part of our focus on emerging markets. In Delhivery, we have found a highly reputable partner who fits well with our focus on supporting high-growth businesses,” said Alain Carrier, senior managing director and head of International, CPPIB.

As at June 30, 2019, CPPIB’s equity investments in India totalled $7.5 Bn (C$9.9 Bn) across all asset classes.  It also has an office in Mumbai and is investing across public and private companies, real estate, infrastructure and various types of funds.

In India, the first investment for CPPIB was BYJU’S wherein it was the part of the edtech platform’s $328 Mn Series F around along with Naspers Ventures BV and General Atlantic Singapore TL Pvt Ltd.

According to Inc42’s State of The Indian Startup Ecosystem 2018 Report, India had over 900 logistics startups as of November 2018. DataLabs by Inc42 notes that in H1 2019, logistics startups raised $567.8 Mn in 9 deals.

In the Union Budget 2019, the government has allocated INR 100 Lakh Cr over the next five years to build and develop critical logistics and transport infrastructure. At present, draft national logistics policy is under works and is expected to bring down India’s expenditure on logistics to 9% of GDP from the existing 14%.

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