E-commerce focused logistics company Delhivery Private Limited has re-entered the food delivery segment, partnering with cloud kitchen brands and restaurant deliveries directly. The firm is also in the market to raise around $300 million. Additionally, it is scouting acquisitions in the B2B space.
While multiple sources confirmed that the company was looking to raise close to $300 million, TechCircle could not ascertain the names of potential investors who will be a part of the round. Regulatory filings with the Registrar of Companies also indicated that Delhivery had amended its shareholders’ agreement with a group of its existing investors.
“The company is looking to buy out the stakes of early investors and use the capital for consolidation in the B2B space,” said a person privy to developments at the Gurugram headquartered company, adding that this could be the company’s final fundraise ahead of a proposed initial public offering (IPO).
Email queries to Delhivery from TechCircle did not receive responses at the time of publishing this article.
“Focus on the B2B space will give the company an additional avenue for growing its business and reduce its reliance on ecommerce shipments,” said Satish Meena, senior forecast analyst at Forrester Research.
With food delivery and renewed partnerships with pharmaceutical and FMCG companies during the Covid-19 pandemic, it is a full circle for Delhivery which started out as a hyperlocal delivery company in 2011 and currently commands a significant chunk of business to customer (B2C) delivery in the e-commerce logistics space.
Re-entry into food delivery
Softbank backed Delhivery, which is the largest B2C e-commerce focused logistics company after Walmart-owned Flipkart’s delivery arm e-Kart, has re-entered the food delivery space, nearly six years after its first outing in 2015 with Opinio.
While Delhivery’s investment in hyperlocal food delivery platform Opinio did not take off, this time around the company has opted to work with food brands and restaurants which have been looking for alternatives to Swiggy and Zomato owing to high commissions charged by those platforms.
Delhi-based Cross Border Kitchens which runs nine different brands confirmed that they were partnering with Delhivery for last mile delivery of food. Delhivery has also been in talks with other brands and digital platforms, said the owner of a brand on condition of anonymity.
Delhivery had started working on the food delivery space stack for a partnership with Alibaba backed Zomato in 2019 which did not materialise. Following this the company has been trying to extend this capability to other players, said an executive aware of the discussions.
“Covid-19 has brought back the focus on hyperlocal deliveries, powered by food, grocery and fresh produce deliveries. The focus on food and hyperlocal delivery is too big a trend for logistics companies to miss in the current market,” said Manish Saigal, managing director and leader for corporate solutions at research firm Alvarez & Marsal.
He added that as smaller players such as Shadowfax, Elastic Run and Swiggy double down on hyperlocal deliveries, it becomes an important line of business for pan-India logistics companies to stay relevant.
Multiple lines of business
Over the years Delhivery has tried out multiple lines of business including freight services, reverse logistics, express parcel deliveries, cross-border logistics as well as warehousing for B2B and B2C orders.
However, the largest contributor to revenue from operations continues to be its B2B operations which makes up 80% of the business.
The company which has raised over $800 million across multiple rounds reported net losses at Rs 1781.03 crore for the financial year 2018-19.