Delhivery plans India’s first e-logistics IPO next year

Pankaj Mishra August 12, 2016 2 min

Gurgaon-based ecommerce logistics company, Delhivery, which is backed by Tiger Global and Nexus Venture Partners, is planning an exit for its investors by exploring an IPO next year, Sahil Barua, the company’s CEO said.

“IPO timing is still not completely certain, (but) we will try and shoot for 2017/2018,” he said. Delhivery has raised around $127 million so far in five funding rounds from investors.

According to company sources, Delhivery’s annual revenues are anywhere between Rs 1100- 1300 crore. “We’re in investment mode (last year the company spent $25 million on operations), but really close to profitability, just a month or two away,” said a person directly familiar with the financials. He requested anonymity.

While the company hopes to become profitable for the six months period by March 2017, full year profitability might take all of next year.

“Profitability is clearly the trigger for thinking of an IPO,” said another company executive. “Then, there’s this opportunity to be the first such IPO from India,” he added. The company is yet to initiate IPO processes.

While other details on the IPO are still unknown, Delhivery’s growth underscores the importance of last mile ecommerce delivery in the booming online retail market. In China for instance, multi-billion dollar companies were born on the back of its e-commerce boom.

Alibaba’s “iron triangle” strategy for instance, is a combination of e-commerce, logistics and finance. As my colleague Jayadevan PK wrote in June this year, data science is at the core of Alibaba’s world domination plans.

In logistics, Alibaba owns a 48% stake in ‘China Smart Logistics,’ or ‘Cainiao.’ The rest of the company is owned by logistics players that are together called ‘Three Tongs, One Da’. They are Shentong, Yuantong, Zhongtong and Yunda, all from a town called Tonglu close to Alibaba’s headquarters Hangzhou, writes Clark. The scale at which it operates is mind blowing. Cainiao is not your typical logistics company. It is essentially a big data platform which links a network of logistics partners, warehouses and consumers. The company recently raised an undisclosed amount of funding at a $7.7 billion valuation.

For its part, Delhivery too is doubling down on technology and data science, as you can read here.


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