FedEx Express, a subsidiary of US based logistics major FedEx Corp, will invest $100 million (Rs 744 crore) in SoftBank backed Delhivery that is set to float its initial public offering (IPO).
The two companies will also enter into a commercial agreement to unlock India’s international trade potential, according to a statement.
As part of the agreement, FedEx Express will focus on international export and import services to and from India. Delhivery will sell FedEx Express’ international products and services in the India market and provide pick-up and delivery services across the country. FedEx will transfer certain assets pertaining to its domestic business in India to Delhivery.
Sahil Barua, co-founder and CEO of Delhivery, said that the company aims to bring new products and opportunities to Indian and global businesses and consumers.
Raj Subramaniam, president and chief operating officer of FedEx Corp, noted that India is a strategic priority for FedEx.
"This strategic alliance will support our long-term vision to grow our India business and serve customers seeking to expand in or enter the Indian market, as well as provide opportunities to develop product and technology solutions together with Delhivery for the benefit of our customers," he added.
FedEx Corp provides customers and businesses worldwide with a broad portfolio of transportation, e-commerce and business services. The NYSE listed firm has an annual revenue of $84 billion. FedEx Express provides delivery services to more than 220 countries and territories.
Backed by Japanese technology conglomerate SoftBank, Delhivery was founded in 2011 as a hyperlocal logistics company. At present it commands a significant market share in the business-to-consumer ecommerce logistics space, though its business-to-business service accounts for nearly 80% of its revenues.
Earlier in May, Delhivery raised nearly $277 million (Rs 2,008.6 crore) from a group of investors led by US investment firm Fidelity.
Singapore sovereign wealth fund GIC, which invested through its unit Gamnat Pte, Abu Dhabi based private investment firm Chimera Investment LLC and UK’s Baillie Gifford, which invested through Pacific Horizon Investment Trust, participated in the round, regulatory filings showed.
The New Delhi based company had last raised $25 million from alternative investments firm Steadview Capital in a secondary transaction in December 2020. At the time Delhivery CEO Barua said that the company was looking to go public in 12-15 months.
TechCircle reported in September last year that the company was on the lookout to raise $300 million ahead of its IPO. With the current round, the company has raised close to $ 1 billion in equity capital.