FedEx unit to invest $100 mn in SoftBank-backed Delhivery

 FedEx unit to invest $100 mn in SoftBank-backed Delhivery

Indian logistics unicorn Delhivery is raising $100 million from FedEx Express, a subsidiary of FedEx Corp, as it continues to strengthen its financial position ahead of a planned initial public offering.

The FedEx investment comes barely two-and-a-half months after Delhivery secured $277 million from Fidelity and other investors at a valuation of around $3 billion. Fidelity had invested $126 million, Singapore sovereign wealth fund GIC put in $75.6 million while Abu Dhabi’s Chimera Investments contributed $50 million. The UK-based investment management firm Baillie Gifford also participated in the round.

New York-listed FedEx, the world’s largest express transportation company, said Friday it has also entered into commercial agreements with Delhivery as part of its long-term vision to grow its India business. Don Colleran, president and CEO of FedEx Express, will join the Delhivery board.

FedEx Express will focus on international export and import services to and from India. Delhivery will, in addition to FedEx, sell FedEx Express international products and services in the India market and provide pick-up and delivery services across India. FedEx will transfer certain assets pertaining to its domestic business in India to Delhivery.

“India is a strategic priority for FedEx,” said Raj Subramaniam, president and chief operating officer at FedEx Corp.

Subramaniam said the alliance will serve customers seeking to expand in or enter India. It will also provide opportunities to develop product and technology solutions together with Delhivery to benefit customers, he added.

Sahil Barua, co-founder and CEO of Delhivery, said: “Our aim is to bring new products and opportunities to Indian and global businesses and consumers through unique access to our networks, and our technology and engineering capabilities.”

Completion of this transaction is subject to closing conditions, including regulatory approvals.

The development comes at a time when Delhivery has been preparing to float an IPO, likely next year.

The logistics company has so far raised a total of $1.2-1.3 billion from a number of investors including Japanese tech investor SoftBank, Canada Pension Plan Investment Board, US-based Carlyle and Tiger Global, China’s Fosun International, Indian private equity firm Multiples PE and venture investor Nexus Venture Partners.

Delhivery was founded in 2011. It has more than 85 fulfilment centres, over 15,000 vehicles and 40,000 executives who deliver a million packages a day, according to its website. The company delivers to more than 17,500 postal code areas across over 2,300 cities in India.

Sumit Upadhyaya

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