FedEx Invests $100m in Indian Logistics Startup Delhivery
One of India’s fastest growing logistics startups has secured a significant investment from FedEx.
The US delivery giant is securing a foothold for further expansion into the Indian market with a $100m equity investment in Gurgaon-based logistics and supply chain startup Delhivery. The agreement is subject to regulatory approval.
Founded in 2011, Delhivery is one of India’s fastest growing logistics startups, delivering an average of 1m packages a day across 2,300 cities. It was recently valued at $3bn after closing a $277m funding round led by Fidelity. Reports suggest it is now eyeing an IPO.
India is a strategic priority for FedEx
As part of the equity investment, FedEx Express India and Delhivery will enter a long-term commercial agreement leveraging both parties’ strengths.
FedEx will offer a range of international import and export services through its global network for both international customers seeking to enter or accelerate their growth in India, and Indian businesses looking for opportunities to expand beyond their domestic market. For its part, Delhivery will sell FedEx Express international products and services in the Indian market, as well as providing pick-up and delivery services across the country.
“India is a strategic priority for FedEx", said Raj Subramaniam, President and Chief Operating Officer of FedEx Corp., adding that the partnership will “support our long-term vision to grow our India business and serve customers seeking to expand in or enter the Indian market”. The pair will also collaborate on developing new products and services, according to Subramaniam.
Sahil Barua, Delhivery's co-founder and CEO, said: “Our aim is to bring new products and opportunities to Indian and global businesses and consumers through unique access to our networks, and our technology and engineering capabilities.”
Don Colleran, President and CEO of FedEx Express, will secure a seat on the Delhivery Board of Directors to strengthen the partnership. FedEX will also transfer undisclosed assets from its Indian business to Delhivery.
Global supply chain companies are eyeing India as the next big growth market for direct-to-consumer logistics. The nation is on track to become one of the world’s biggest ecommerce powers by 2025, with forecasts suggesting the market could be worth worth $99bn with 220 million consumers shopping online.
XPO Logistics Completes Spin Off of GXO Logistics
XPO Logistics has completed its spin-off of GXO Logistics, creating two independent public companies.
GXO Logistics today marked the occasion by ringing the opening bell on the New York Stock Exchange. GXO leadership and board members were in Manhattan to mark the “exciting milestone in GXO’s history”, opening Wall Street and celebrating the business’s first day of regular way trading.
“We consider it a privilege to launch GXO as a new company at the top of the industry — the world’s largest pure-play logistics provider,” said chief executive Malcolm Wilson, in a statement. “We have a powerful platform for future growth, including our culture of innovation, strong customer relationships, seasoned leaders and a world-class team. This is day one of unlocking vast new potential for our company.”
GXO Logistics in Brief
- CEO: Malcolm Wilson (formerly CEO, XPO Logistics Europe)
- Employees: 94,000 approx.
- Warehouse capacity: 208m sq.ft
- Key customers: Apple, Nike, Whirlpool, Nestlé
XPO’s Pure-Play Strategy
XPO Logistics announced plans to spin off its logistics division in December 2020, with the intention of creating two pure-play entities focussed on contract logistics (GXO) and freight transportation (XPO).
In an interview last month, GXO Chief Investment Officer Mark Manduca said there is “massive scope” for growth both organically and through M&A activity. "A deep pool of potential new business exists for GXO, both through share gain and penetration,” he added, explaining that companies are increasingly looking to outsource logistics as supply chains become ever complicated.
GXO is a leader in logistics automation and robotics, leveraging AI and machine learning to ‘turn logistics into a competitive advantage’ for its customers. It has approximately 94,000 employees, and counts Apple, Nike and Whirlpool among its blue chip customers. The company says it will also look to strengthen its presence in other high-growth areas, primarily ecommerce, apparel, technology, food and beverage, and consumer electronics. The company has 208m+ sq.ft of warehouse space across 869 locations in 27 countries.