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FedEx Express, a subsidiary of delivery services giant FedEx, is investing $ 100 million in Indian startup Delhivery as the global company seeks to expand its presence in the South Asian country.
Friday’s investment comes less than two months after the Gurgaon-based startup, valued at $ 3 billion, secured $ 277 million ahead of a first public offering in the coming quarters.
As part of the deal, the companies will enter into a long-term trade deal. FedEx Express will focus on international export and import services to and from India, and Delhivery, in addition to FedEx, will sell FedEx Express international products and services in the Indian market and provide pickup and drop-off services. delivery throughout India. FedEx will transfer certain assets related to its domestic operations in India to Delhivery.
“Our goal is to bring new products and opportunities to Indian and global businesses and consumers through unique access to our networks and technological and engineering capabilities,” Delhivery co-founder Sahil Barua said at About Friday’s investment.
Delhivery started life as a food delivery company, but has since grown to a full range of logistics services in over 2,300 Indian cities and over 17,500 postcodes. It is one of a handful of startups trying to digitize the logistics market demand and supply system through a freight exchange platform.
Image: Bernstein
Its platform connects shippers, agents and truckers offering road transport solutions. The startup says the platform is reducing the role of brokers, making some of its assets such as trucking – the most popular mode of transportation for Delhivery – more efficient and ensuring round-the-clock operations.
This digitization is crucial to address the inefficiencies of the Indian logistics industry which has long held back the national economy. Poor planning and forecasting of demand and supply increases transportation costs, theft, damage and delays, Bernstein analysts wrote in a report last month on India’s logistics market.
Delhivery, which claims to have delivered over a billion orders, works with “all of the biggest e-commerce companies and major Indian companies,” according to its website, where it also says the startup has worked with more than 10 000 customers. For the last stage of delivery, its couriers are allocated an area that never exceeds 2 km², which allows them to make several deliveries per day to save time.
The TAM (Total Addressable Market) of the Indian logistics market is over $ 200 billion, according to analysts at Bernstein. The startup said late last year that it planned to invest more than $ 40 million within two years to expand and increase the size of its fleet to meet growing demand for orders as more and more people are shopping online amid the pandemic.
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