Delhivery’s plans to secure $150 Mn funding; expansion in the cards

We have heard enough about logistics not keeping up with the pace of growth of online marketplaces and how it is possibly the weakest link in the ecommerce chain. Diwali last month only added to the indications about the shortfalls in the logistics networks.

Yesterday, we heard about India Post’s initiative to upgrade technology and spruce up on their delivery services to solve last mile delivery issues in ecommerce.

Word on the block now is that Delhivery is trying to raise funds to enhance their last mile services to solve the logistics problems. SSN Logistics Pvt. Ltd, Gurgaon based ecommerce logistics company, operates under the brand Delhivery. According to the co-founder Sahil Barua, they are in talks with various investors to raise funds close to $150 million (Rs 900 crore) in the coming 24 months.

“We are currently in talks with a few investors including the existing ones,” he said. “The funds will be used to enhance our last-mile delivery services and real-time tracking technology.”

Journey of Delhivery till now

Barua, Mohit Tandon, Suraj Saharan, Bhavesh Manglani and Kapil Bharati founded the express logistics firm in 2011. Delhivery operated to provide ecommerce logistics solutions like:

  • Last mile delivery
  • Third party and transit warehousing
  • Reverse logistics
  • Payment collection
  • Vendor-to-warehouse shipping
  • Vendor-to-customer shipping

With presence in about 180 cities and towns, Delhivery has 255 delivery centres spread across the country. There are plans to expand to 5,000 centres by 2016 year end.

In September this year, Delhivery secured series C funding from private equity firm Multiple Alternate Asset Management, along with Nexus Venture Partners and Times Internet.  Talking about the $35 million (about Rs 212 crore) funding, Barua had said, “This round of (Series C) financing will be used to invest extensively in our growing portfolio of commerce technologies and towards expanding our logistics infrastructure, fulfilment and transportation services.”

Delhivery’s take on the logistics scenario

Talking about the challenges in the India market, Barua said, “The challenge with the existing logistic models is that the way it is set up is typically eight or nine kilometres away from a customer’s residence. What we realise is that our delivery centres (DCs) need to be actually closer to where the customers are.”

He feels product returns is another area of concern for logistics players. “Every e-commerce company we work with has its own return policy. It is a non-uniform process. Customers call them and then they call us. Ideally, the customers should be in touch with the logistic companies because they are the ones who will come to pick the product,” he said.

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