Gurugram-based Delhivery is one of India’s newest unicorns, valued at $1.5 billion in March when it raised $413 million in a Series F round led by SoftBank Vision Fund, along with existing investors Carlyle Group and Fosun International. In September, the Canada Pension Plan Investment Board bought an 8% stake in Delhivery for $115 million from an existing investor.
“Delhivery’s focus is mostly on the e-commerce segment, and has shown healthy growth… It’s not an unusual idea to look out for M&As. And since Blue Dart has a pretty strong franchise business in India, it is attractive to Delhivery from a B2B business perspective,” said one of the people cited above.
Blue Dart reported a 35% year-on-year fall in consolidated net profit in the September quarter at ₹14.64 crore. Gati posted a net loss of ₹11.10 crore for the quarter ended 30 September, compared with a net profit of ₹1.31 crore during the same period a year ago.
According to the person cited above, logistics businesses usually receive the highest order values from direct corporate tie-ups, a strong point of Blue Dart.
“Blue Dart has a vast logistics fleet of its own, good pin code coverage and entrenched corporate relationship with big brands. A lot of the strength in traditional logistics business lies in leveraging loyalty,” the person said. “Blue Dart has long-standing tie-ups with a lot of corporates for their B2B vertical. Retail logistics is a different market altogether, but B2B vertical is the biggest play for traditional logistics firms. The deal is also for user acquisition.”
A Blue Dart spokesperson said, “As a matter of principle, Blue Dart does not comment on market rumours.” Emails sent to Delhivery co-founder Sahil Barua and Gati on Monday remained unanswered till press time.
India’s logistics industry is expected to be worth $215 billion by 2020-21, CARE Ratings said in a 2018 report.
“Delhivery brings reporting and management technologies that can be very disruptive for traditional logistics players,” said Anup Jain, managing partner at Orios Venture Partners, an investment firm.
The article was first reported on Livemint.com