Ecommerce logistics providers have a battle of their own going on. Each one is pushing to be number one in this field. Ecom Express is one of the top rankers so far and it plans on going into a new round of funding for at least $75 million, claim two sources aware of the matter.
Warburg Pincus, is an existing private investor in the ecommerce logistics company and it appears that it could provide Ecom Express another $75 million, one of the sources mentioned. With this amount, the firm’s investments could reach $150 million.
There is no official confirmation received so far but one of the sources said, “They (Ecom Express) have recently launched the process to raise a new round of funding. The process is at an initial stage right now and the fund-raise is expected to close only by the second half of the year.”
Comparison against competition
Ecom Express and Delhivery are two of the largest ecommerce focused delivery providers in the country.
By June 2015, Ecom Express received an investment of Rs.850 crore from Warburg Pincus. Only a month before, Delhivery secured Rs.542 crore from Tiger Global Management.
A week ago, it was reported that Delhivery was trying to initiate a new round of funding with Carlyle Croup, a private equity firm and Fosun, a Chinese conglomerate. The logistics provider is looking at raising at least $100 million. And, this transaction could put the Delhi-based firm at nearly $700 million.
What plans does Ecom Express have for its investments?
The other source cited above stated that the investments collected will be utilised to expand fulfilment operations. To take on its rival Dehivery, Ecom Express will be increasing its network of fulfilment centres. The company plans on catering to at least 2,000 cities and towns in the next two years. It has also begun receiving, packing and shipping customer orders.
Ecom Express manages 1,200 delivery centres and 33 transit hubs according to its website. It delivers to about 11,000 pin codes at the moment.
Nestor Consulting India’s chief executive and managing director, Sanjay Sethi claims that the impending implementation of the goods and services tax (GST) is alluring people to the logistics business.
He said, “GST, which is a few months away, will result in a significant shift in the way logistics business is managed in the country. The logic of setting up warehouses for tax efficiency will change and people will set up mega storage spaces close to consumption markets, which will drive demand for funds.”