SoftBank Vision Fund is getting ready to open the year with yet another unicorn-making investment, this time in the logistics space. The Masayoshi Son-led fund has sought approval from the Competition Commission of India (CCI) to acquire a 37.87% stake in Delhivery Pvt Ltd.
The proposed combination is in the nature of acquisition and falls under 5(a)(ii)(B) of the Competition Act, 2002. The Japanese investment firm will make the acquisition through a Cayman Islands-based holding company called SVF Doorbell (Cayman) Ltd, created on behalf of the $93 Bn SoftBank Vision Fund.
The reports regarding SoftBank’s investment in Delhivery surfaced in November last year. The company was speculated to raise $450 Mn from the Vision Fund, thereby making SoftBank, the largest shareholder in Delhivery.
As Inc42 reported earlier, SoftBank, through its Vision Fund, may invest an estimated $350 Mn as fresh capital in Delhivery. It will also make additional secondary transactions, estimated at $100 Mn, to further bump up its stake in the company. As part of the secondary deal, the company’s founders are also expected to cash out and get new stock options at a strike price equal to 15% of the price per share in the latest round.
Founded in 2011 by Mohit Tandon, Sahil Barua, Bhavesh Manglani, Kapil Bharati, and Suraj Saharan, Delhivery services about 600 cities and 8,500 pin codes in India. It has 12 fulfilment centres for B2C and B2B services and works with ecommerce companies such as Flipkart and Paytm.
The Economic Survey 2017-18 said the logistics industry is set to be worth $215 Bn in the next two years, growing at a CAGR of 10.5 %. This makes Delhivery a lucrative bet for SoftBank. Also, as a company, Delhivery has been showing a strong financial performance.
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.
SoftBank has already invested more than $7 Bn in the Indian startup ecosystem. In 2018, the Japanese conglomerate realised a gain of $1.3 Bn (¥ 146.7 Bn) from the sale of its shares in Flipkart, as part of $16 Bn Flipkart-Walmart acquisition deal.
In a bid to foray into the Indian food delivery space, SoftBank Vision Fund is also exploring investment opportunities in either of the two foodtech unicorns Swiggy and Zomato.