CDC Group writes logistics company Ecom Express a $36 mn cheque

Gurugram headquartered Ecom Express, which provides end-to-end technology enabled logistics services, has raised $36 million from CDC group, the development finance institution backed by the UK government.

The announcement on the CDC investment was made on Tuesday after a review of the investment by the Competition Commission of India.

This infusion comes two years after New York-headquartered private equity investor Warburg Pincus pumped $30 million into the company as part of a ‘supplemental agreement’ in 2017. The investor had first committed to investing $133 million in the company in 2015 which valued the company at $183 million for a 72.3% stake in the company, according to data compiled by VCCEdge. 

The company will utilise the capital from this round to expand its network for ecommerce deliveries as well as grow its employee count from 32,000 to 47,000 over the next two years, it said in a statement. CDC will work with Ecom Express to transition part of its operations to use electric vehicles in the fleet, the statement added.

“The infusion of capital will help us further expand our delivery footprint in connecting towns and rural centers across the country. Besides expanding reach, the company plans to invest in technology, deploy advanced parcel sortation systems, strengthen network reliability and infrastructure, and finally, make development impact with job creation, environmentally responsible initiatives and gender diversity,” said TA Krishnan, chief executive officer of Ecom Express in a statement. The company currently has a network across 25,000 pincodes.

Krishnan, along with other logistics and distribution industry executives Manju Dhawan, K Satyanarayana and Sanjeev Saxena, founded the company in 2012. Ecom Express works with e-commerce companies including Amazon, Flipkart, Clovia to provide express delivery and fulfilment services. It also works with telcos and banking and financial services players for e-KYC and document collection. 

“In Ecom Express, we have a partner company that recognises the vital importance of creating a genuinely sustainable and gender inclusive business,” Srini Nagarajan, managing director and head of Asia at CDC, said in the statement. 

“We are dedicated to responsibly investing our capital in India, with over $1.7 bn currently committed to local businesses. We have the same amount again to invest over the next few years and look forward to working with many more businesses that are as environmentally and socially conscious as Ecom Express,” Nagarajan added.

Ecom Express competes with the likes of SoftBank backed Delhivery which was valued at $1.5 billion in March this year. In July, returning investors Warburg Pincus and SAIF Partners infused $65 million in trucking company Rivigo. Bengaluru-based Zinka Logistics which operates third party logistics service provider BlackBuck also recently raised $150 million led by Goldman Sachs.