Alibaba-backed Ninja Van to expand B2B offerings, deploy capital for automation

Photo: Ninja Van

Armed with $578-million fresh funding in an Alibaba-backed round, Singapore-based logistics startup Ninja Van is ramping up its business units beyond last-mile delivery.

Ninja Van, which started out helping businesses deliver goods to consumers, has recently built its B2B arm, offering merchants cross-border shipment, escrow and inventory sourcing services. Providing supply chain financing solutions would likely be next on the cards, Ninja Van co-founder and chief executive Chang Wen Lai said in an interview.

Lai said, the B2B segment – a new revenue stream – does not produce significantly higher margins but is a natural extension of the business as it taps on the firm’s strong network of merchants and suppliers.

For instance, Ninja Van is able to do cross-border procurements for small online businesses, a space not served by big logistics corporations like DB Schenker.

Last year, a Bain, Google, and Temasek report estimated Southeast Asia’s e-commerce gross merchandise value (GMV) to be $100 billion.

Lai said that around 60% to 80% of the GMV comes from imported goods, while Ninja Van accounts for 20% of the e-commerce delivery market share.

“That’s $12 billion of GMV we can support on the procurement side. And based on revenues of logistics, supply chain financing, FX remittance … the revenue pool there is almost more than $1 billion,” Lai said.

“Neutral” in serving e-commerce players

Ninja Van on Sunday announced that it raised $578 million from the likes of Geopost and B Capital Group. The round increased the firm’s valuation to $1.85 billion, according to DealStreetAsia-DATA VANTAGE calculations based on Accounting and Corporate Regulatory Authority (ACRA) regulatory filings.

The only new investor got heads turning. Alibaba’s $200-million investment pushed it up Ninja Van’s cap table to become its second-largest shareholder with a 10.8% stake, per Data VANTAGE estimates. The Chinese tech giant runs its own logistics arm Cainiao and Southeast Asian e-commerce business Lazada.

Lai maintains that the investment is a commercial decision, and they are still “neutral” in serving e-commerce players. Ninja Van also delivers for Sea Limited’s Shopee, a Lazada competitor.

“I don’t think there will be any special concessions on either part,” Lai said.

“[Alibaba] believes that for any e-commerce to grow, logistics need to grow,” he added. “As long as our infrastructure improves, our cost structures improve, our quality [improves], everyone benefits. But because Lazada is big enough, they probably benefit more.”

Before it acquired Lazada in 2016, Alibaba had put more than S$600 million ($442 million) in Singapore Post and its subsidiary Quantium Solutions International, and currently owns 14.6% of the publicly-listed postal service.

But aside from the news that Lazada had moved its warehouse operations to a SingPost logistics hub in 2017, little else has been heard about how the two companies are working together. In 2018, SingPost also diluted its stake in Chinese cross-border delivery provider and Alibaba-backed 4PX, while Cainiao acquired more shares in 4PX.

Ninja Van’s latest pool of funds will go towards automating its 30 sorting centres across Southeast Asia.

Lai said many of these distribution hubs, where packages are sent to before being sorted for delivery, are still run manually. With both the e-commerce and logistics markets growing quickly, there is a need to invest in facilities like these. The company has seen its delivery volumes increase threefold compared to the pre-pandemic period.

“We are confident that we are here to stay and it’s time to start investing in assets and infrastructure that will allow us long-term cost and quality advantage,” Lai said.

Automation, he said, will help the company make fewer sorting mistakes and increase delivery turnaround time. Its centres in Singapore have already started implementing automated sorting processes, and the fresh funds will go into upgrading its other hubs throughout Southeast Asia.

Not in a rush to test public markets

Ninja Van is in six countries — Singapore, Vietnam, Indonesia, Malaysia, the Philippines, and Thailand. Its entry into Brunei has been delayed indefinitely due to the pandemic, Lai said.

Ninja Van’s latest publicly available financial figures, for the year ending July 2019, showed that its revenue was at $152 million in 2019, with a net loss of $85.6 million. Lai declined to reveal specific figures but said that its finances have improved significantly. “In that period, we were still really establishing ourselves in all the different countries,” he said.

“At this juncture, [we’re] rather entrenched in all these countries,” he added.

While Ninja Van has been growing, so has its competitors. In Indonesia, for example, J&T Express is said to be raising $2 billion ahead of its IPO, reports said, which could give them extra firepower to gain market share. A China Renaissance report published in May this year put Ninja Van’s parcel volume behind Kerry Express, J&T Express, and JNT.

Source: China Renaissance, Logistics – delivering more in a mile, May 2021.

Lai said the business is not just a volume game. It also depends on the quality of the deliveries, how diversified the business is, and its network’s productivity.

Lai said that the company is not in a hurry to go public and it may not have an IPO next year. The Financial Times reported in July that the company was looking to go public in the US next year.

“We have strong access to the private markets. We are well-funded. The public market is another access point, but we’re not overly hung up on having that access point,” he said. “Even if you IPO, nobody is selling their shares.”

As for whether the company could list in Singapore, which recently announced a $1.1 billion fund to boost its stock exchange, Lai said that “the jury’s still out”.

“I think we are open to how the exchanges work — whether it’s disclosure-based, whether it’s rules-based, what’s the depth of liquidity of the markets, what’s the mentality of investors,” he said.

Ninja Van currently has more than 61,000 employees including delivery personnel and delivers around 2 million parcels a day, it said. The company has raised a total of $978 million since its founding in 2014.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.