Ecom Express raises Rs75.5 crore from PE firm
Peepul Capital now owns a majority stake in Ecom Express and a deal is likely to be announced this week
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Bangalore: Ecom Express Pvt. Ltd, an e-commerce logistics firm started by former executives of courier company Blue Dart, has raised Rs.75.5 crore from private equity firm Peepul Capital after more than six months of negotiations with various investors.
Peepul Capital now owns a majority stake in Ecom Express and a deal is likely to be announced this week, two people familiar with the matter said. Ecom Express may receive the money in tranches, the people said on condition of anonymity. Documents filed with the registrar of companies by Ecom Express confirmed that Chennai-based Peepul Capital invested Rs.75.5 crore.
Ecom Express declined to comment.
Started in January 2013, Ecom Express delivers products to customers in more than 90 towns. It has over 150 distribution centres across the country and employs roughly 3,000 employees. The company is led by T.A. Krishnan, who helped start the e-commerce business at Blue Dart, one of India’s largest logistics firms.
Ecom Express and rival e-commerce logistics firm Delhivery help sites such as Flipkart, Snapdeal and Amazon deliver products to customers, particularly in far-flung towns that are too expensive for e-commerce firms to reach.
Though some sites such as Flipkart have their own logistics arms, most e-commerce firms use logistics companies to get products to customers as deliveries require huge capital investments. Even Flipkart works with logistics companies to deliver products to some customers.
The new round of funds received by Ecom Express follows that of Delhivery, which said on Monday that it raised $35 million (around Rs.210 crore) from investors led by private equity firm Multiples Alternate Asset Management. Delhivery’s older investors Nexus Venture Partners and Times Internet Ltd also put money in the firm in the round.
Specialty e-commerce logistics companies are starting to face competition from traditional logistics firms such as Deutsche Post DHL (DHL) and DTDC. DHL, owner of Blue Dart, said on 26 August that it was investing €100 million over two years in building infrastructure and warehouses, as well as options for delivery and payment, to cater to e-commerce companies.
Logistics suppliers are expected to benefit significantly from the rising popularity of e-commerce sites, which are eagerly trying to tap shoppers in smaller towns and cities to increase their user base.
Online retail is valued at $3.1 billion and estimated to grow to $22 billion in five years, according to a November report by brokerage CLSA.
“Delivery is one of the most important components of e-commerce and if the logistics firms do a good job of maintaining good quality customer experience, they will benefit greatly in the coming years,” said Gaurav Gupta, senior director, retail, at Deloitte, a consultancy. “As e-commerce firms expand, both in cities and towns, they will need logistics firms to support them.”
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