FedEx invests $100 mn in Delhivery ahead of IPO
- As part of the agreement, FedEx Express will enter into a long-term commercial pact with SoftBank-backed Delhivery
FedEx Express, a unit of American transportation giant FedEx Corp., on Friday said it has agreed to invest $100 million in logistics services provider Delhivery, one of India’s unicorn startups that are set to go public soon.
As part of the agreement, FedEx Express will enter into a long-term commercial pact with SoftBank-backed Delhivery. While 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 India and provide pick-up and delivery services across the country.
In addition, FedEx will transfer certain assets pertaining to its domestic business in India to Delhivery.
“India is a strategic priority for FedEx. This strategic alliance will support our long-term vision to grow our India business and serve customers seeking to expand in or enter the Indian market, as well as provide opportunities to develop product and technology solutions together with Delhivery for the benefit of our customers,” said Raj Subramaniam, president and chief operating officer of FedEx Corp.
The completion of the transaction is subject to closing conditions, including regulatory approvals.
“We are excited to partner with FedEx and look forward to the synergies created between Delhivery’s capabilities in India and FedEx’s global network. 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,” said Sahil Barua, co-founder and chief executive officer, Delhivery.
Don Colleran, president and chief executive of FedEx Express, will join the Delhivery board. FedEx Express provides delivery services to more than 220 countries and territories.
Delhivery, founded in 2011 as a hyperlocal logistics company, commands a significant market share in the business-to-consumer e-commerce logistics space, though its business-to-business service accounts for nearly 80% of its revenues.
In May, Delhivery raised nearly $277 million from a group of investors led by US investment firm Fidelity.
Singapore’s sovereign wealth fund GIC, Abu Dhabi-based private investment firm Chimera Investment LLC and UK’s Baillie Gifford participated in the round, regulatory filings showed.
The New Delhi-based company last raised $25 million from alternative investments firm Steadview Capital in a secondary transaction in December 2020. At that time, Delhivery CEO Barua said the company was looking to go public in 12-15 months. With the current round, the company has raised close to $1 billion in equity capital.
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First Published:17 Jul 2021, 12:18 AM IST
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