Delhivery Secures $100 Million Investment from FedEx

FedEx Invests $100 Million in Indian Logistics Startup Delhivery

FedEx Express, a key division of the global logistics provider FedEx, is making a substantial investment of $100 million into Delhivery, an Indian startup. This strategic move signifies FedEx’s commitment to strengthening its operational footprint within the South Asian region.

Recent Funding and Valuation

The investment, announced on Friday, follows closely on the heels of Delhivery securing $277 million in funding just under two months prior. This earlier capital raise was completed in anticipation of an initial public offering planned for the coming quarters. Delhivery is currently valued at $3 billion.

Strategic Partnership and Service Expansion

A long-term commercial agreement accompanies this investment. FedEx Express will concentrate on providing international export and import services related to India.

Delhivery will expand its service offerings to include the sale of FedEx Express international products and services within the Indian market. Furthermore, Delhivery will handle pickup and delivery operations throughout India.

As part of the agreement, certain assets related to FedEx’s domestic Indian operations will be transferred to Delhivery.

Delhivery’s Vision for Growth

Sahil Barua, co-founder of Delhivery, stated that the investment aims to introduce innovative products and opportunities to both Indian and international businesses and consumers. This will be achieved through leveraging network access, alongside advanced technology and engineering capabilities.

From Food Delivery to Comprehensive Logistics

Initially established as a food delivery service, Delhivery has successfully transitioned into a provider of comprehensive logistics solutions. The company currently serves over 2,300 cities and more than 17,500 postal codes across India.

It is a leading startup focused on modernizing the logistics sector through a digital freight exchange platform.

Digitizing the Logistics Landscape

The platform effectively connects shippers, agents, and trucking companies, offering road transport solutions. This approach minimizes the reliance on intermediaries, enhances the efficiency of assets like trucking – a primary mode of transport for Delhivery – and ensures continuous operations.

Addressing Inefficiencies in the Indian Logistics Sector

This digitization effort is vital for overcoming longstanding inefficiencies within the Indian logistics industry, which have historically hindered national economic growth. Analysts at Bernstein have noted that inadequate demand and supply forecasting leads to increased costs, theft, damage, and delivery delays.

Delhivery’s Extensive Reach and Delivery Model

Having processed over 1 billion orders, Delhivery serves all of India’s major e-commerce companies and numerous leading enterprises. The company’s website indicates a customer base exceeding 10,000.

To optimize last-mile delivery, couriers are assigned areas limited to 2 square kilometers, enabling multiple deliveries per day and maximizing time efficiency.

Market Potential and Future Investment

Bernstein analysts estimate the total addressable market (TAM) for the Indian logistics sector to be over $200 billion. Late last year, Delhivery announced plans to invest over $40 million over two years to expand its fleet and meet the increasing demand driven by the growth of online shopping.