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Startups

Canada pension fund buys $115m stake in Indian unicorn Delhivery

CPPIB aims to broaden exposure in sector driven by rise of e-commerce

Growing on the back of the e-commerce boom, Delhivery provides logistics services in over 2,000 cities across India.   © Reuters

NEW DELHI -- Canada Pension Plan Investment Board (CPPIB) Monday announced that it has invested $115 million in SoftBank Group-and Carlyle-backed Indian logistics startup Delhivery, in a bid to broaden its exposure in the country's logistics sector.

CPPIB has routed the investment through Fundamental Equities Asia Group, which performs fundamental research and makes long-term investments in companies throughout Asia, it said in a statement.

The funding talks between the two companies first surfaced in May this year. Last month, the Competition Commission of India (CCI) had approved the Canadian pension fund's proposal to acquire up to 8 percent stake in Gurugram-based Delhivery.

"The continued strong growth of e-commerce has generated significant opportunities in India's express logistics space for long-term investors such as CPPIB," Deborah Orida, senior managing director and global head of active equities.

As of June 2019, CPPIB's equity investments in India totaled C$9.9 billion across all asset classes. Other investments by CPPIB's Fundamental Equities Asia in the country include Kotak Mahindra Bank, Alibaba Group Holding, Ant Financial, and Samsung Electronics.

Founded in 2011 by Sahil Barua, Mohit Tandon, Bhavesh Manglani, Suraj Saharan and Kapil Bharati, Delhivery provides transportation, warehousing, freight services, and overall fulfillment services to various customers in over 2,000 cities across India.

In March, Delhivery had secured over $400 million in a financing round led by Japan's SoftBank Vision Fund, with participation from existing investors private equity firm Carlyle and Fosun. The financing round had reportedly valued Delhivery at over $1.5 billion then. The company also counts Tiger Global and Nexus Ventures among its list of backers.

Delhivery's founder & CEO Sahil Barua said, "We are delighted to welcome CPPIB as a new partner for our next phase of growth alongside our existing partners. The last year has been particularly exciting for us at Delhivery. We have crossed 17,500 pin codes across India, launched 3 new businesses, and created over 10,000 new jobs ... CPPIB's investment coincides with a major milestone for the company as we cross over 500 million in cumulative shipments to date."

Delhivery, which competes with the likes of Blackbuck and Rivigo, was also in the news for acquiring Indian operations of Dubai-based logistics company Aramex earlier this year.

According to data released by Tracxn Labs in December last year, the startups playing in the digitally-driven logistics and supply chain space in India attracted investments worth $1.89 billion till then in 2018. This year is expected to continue the momentum.

In May, BlackBuck announced that it had raised $150 million (Rs 10.5 billion) in a Series D equity funding round led by Goldman Sachs Investment Partners and Silicon Valley-based Accel. The startup has raised over $230 million in funding to date.

Another major player operating in the space, Rivigo, raised a funding of $65 million in its ongoing Series E round, led by existing investors Warburg Pincus and SAIF Partners.

DealStreetAsia is a financial news site based in Singapore that focuses on corporate investment activity in Southeast Asia and India. Nikkei recently announced the acquisition of a majority stake in the company.

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