CPPIB bets $115 million on logistics unicorn Delhivery

Delhivery, the SoftBank backed logistics company, has raised $115 million from Canada Pension Plan Investment Board (CPPIB). The latest round takes the total capital raised by the Gurugram based firm to nearly $800 million, making it the highest funded player in the technology-enabled logistics sector.

CPPIB, Canada’s largest pension fund manager, invested through Fundamental Equities Asia (FEA) Group, which makes long term investments in Asian companies, according to a statement.

Details on the stake that the pension fund acquired were not disclosed. However, in May this year, CPPIB had sought the Competition Commission of India’s (CCI) approval to acquire an 8% stake in Delhivery in a proposed secondary transaction. The CCI approval for the same came through late last month. The investment gives the pension fund one board seat in the company. 

Prior to the current round, the company raised $413 million in March this year in a growth round led by Japanese technology conglomerate SoftBank Group Corp’s Vision Fund. The round, by TechCircle’s estimates, valued Delhivery at $1.5 billion, catapulting the company to the unicorn club. The term unicorn is industry parlance for startups valued privately at $1 billion or more.

Apart from SoftBank, the company has in the past raised capital from a number of marquee investors including private equity firms Carlyle and Multiples Alternate Asset Management, hedge fund Tiger Global Management and Chinese venture capital firm Fosun.

“CPPIB’s investment coincides with a major milestone for the company as we cross over 500 million in cumulative shipments to date,” Delhi founder and CEO Sahil Barua said.

Previously known as SSN Logistics, Delhivery was founded in 2011 by Barua, Mohit Tandon, Suraj Saharan, Kapil Bharti and Bhavesh Manglani. It started off as a company that provided on-demand services and subsequently evolved into a full-fledged logistics services provider. The company claims to serve more than 17,500 pincodes and 2,000 cities across the country. It offers a full suite of logistics services from express parcel delivery to reverse logistics to B2B and B2C warehousing.

For the financial year 2017-18, the company reported a 38% growth in operating revenues at Rs 1,023.05 crore from Rs 743.70 crore the previous year. Expenses increased 27% to Rs 1,765.73 crore from Rs 1,393.54 crore. Net loss widened to Rs 692.21 crore from Rs 637.83 crore.

The technology-enabled logistics sector has been a hotbed for investor activity lately. In July, Rivigo Services raised $65 million in a funding round led by existing investors Warburg Pincus and SAIF Partners. The same month, Freight Tiger, a business-to-business (B2B) logistics platform, raised $8 million in a round led by existing investor Lightspeed Venture Partners.

In June, TechCircle was the first to report that supply chain and logistics solutions provider LEAP India had raised Rs 100 crore from private equity firm TVS Capital.

In May, logistics management company Locus raised $22 million in a round led by Tiger Global and  and Falcon Edge.