Indian logistics unicorn Delhivery has acquired smaller rival Spoton Logistics to strengthen its B2B operations and grab a bigger piece of the pie from the country’s USD 215 billion logistics market.
Although the company did not disclose the deal size, a report by local media Economic Times, citing sources, said it was an all-cash transaction worth USD 300 million.
The development comes at a time when the Gurugram-based startup has begun the groundwork to list its shares in public markets early next year. Delhivery is reportedly looking to raise around USD 500 million through the IPO.
“This development is consistent with our objective of being growth-oriented and building scale in each of our business lines,” said Sahil Barua, Delhivery CEO in a statement on Wednesday. “Over the past ten years, Delhivery has established a leading position in B2C logistics and now by combining our part truckload business with Spoton’s, we will be on the path to the same position in B2B express as well.”
Started in 2011 by Sahil Barua, Mohit Tandon, Bhavesh Manglani, Suraj Saharan, Kapil Bharati, and Bhavesh Manglani as an express delivery partner for restaurants, Delhivery shifted its focus to cater to e-commerce shipments within the first six months. Over the last decade, it has become one of the dominant players in the e-commerce logistics space, having completed over one billion shipments. The company claims to currently work with 17,000 customers, including e-commerce firms and SMEs, serving about 19,500 neighborhoods across 2500 plus cities.
Earlier in May, the company landed a USD 277 million check from marquee investors like Fidelity and GIC at a valuation of USD 3 billion. Barely two months later, it raised USD 100 million in strategic capital from FedEx Express, a subsidiary of global logistics solutions provider FedEx Corp.
Prior to these two rounds, the company had raised capital almost two years ago—a USD 413 million round led by SoftBank Vision Fund, which catapulted the startup into a unicorn. Overall, it has raised about USD 1.3 billion in funding to date.
Spoton is the second acquisition by Delhivery this year. In March, it scooped up Primaseller, a California-based SaaS company providing order management software for omnichannel retailers.
Bengaluru-based Spoton Logistics offers express logistics services to customers across sectors like automotive, engineering, pharmaceutical, electronics and electricals, hi-tech, and lifestyle and retail. It was incorporated in 2012 when private equity firm India Equity Partners bought the domestic business from shipping company TNT India. In 2018, private equity firms Samara Capital and Xponentia Fund Partners acquired Spoton for USD 100 million.
With B2B commerce growing rapidly amid massive digitization in the world’s second-most populous country, Spoton is expected to boost Delhivery’s revenues.
Sandeep Barasia, chief business officer of Delhivery, believes the combined scale of the two companies and their focus on technology and data will enable them to develop new solutions for customers and enter new verticals in freight.
“We will continue to invest in improving our clients’ businesses through our investments in people, technology, network, and infrastructure,” said Abhik Mitra, managing director of Spoton Logistics, in a statement. “Our teams and our business partners will have an opportunity to be part of a much larger organization with significant opportunities for growth.”
