SoftBank Vision Fund is in talks to invest $200-250 million (Rs 1,470-1,837 crore) in ecommerce-focused logistics player Delhivery, two people familiar with the development said.
The $100-billion fund started by SoftBank’s Japanese billionaire founder, Masayoshi Son, is evaluating Delhivery at a post-money valuation of around $1.2 billion, which will take the seven-year-old company to the unicorn club.
“They have been evaluating Delhivery seriously for the past few months but a transaction is not final yet,” said one of the people.
Emails sent to Delhivery and SoftBank on Wednesday evening, seeking comment, did not elicit any responses till press time.
For Delhivery, an investment led by the Tokyo-headquartered strategic holding company will provide it greater capital runway, given that it comes after it was reported that the logistics firm decided to push back plans for an anticipated $350-million initial public offering, an issue it had been working on for more than 18 months.
In June, ET was the first to report that the Gurgaon-headquartered company, which has emerged as the most dominant player in the ecommerce-focused logistics segment, had appointed investment banks Goldman Sachs, Morgan Stanley, Citigroup and Kotak to run the issue. The IPO was expected to provide a partial exit to some of its investors, particularly those that had invested in the company three to four years ago.
Prior to this round, Delhivery had raised an estimated $260 million, across rounds. Its investors include private equity giant Carlyle Group, Chinese diversified conglomerate Fosun International, Tiger Global Management and Times Internet, the digital arm of the Times of India Group that also publishes The Economic Times.
In its last funding round, which saw the entry of the Carlyle Group into its investor cap table, Delhivery was valued at about $800 million.
In the financial year ended March 2017, Delhivery’s losses narrowed to Rs 249 crore from Rs 371 crore a year earlier, while revenue rose to Rs 751 crore from Rs 523 crore.
Like PolicyBazaar, a SoftBank portfolio company that had been contemplating an IPO, a fund infusion from SoftBank will allow Delhivery to stay private for much longer, a strategy that SoftBank usually prefers given its ability to write outsized cheques and back its portfolio companies with a view to back them over the long term, and beyond the investment cycles of most private equity firms.
Founded in May 2011 by Sahil Barua, Mohit Tandon, Bhavesh Manglani, Suraj Saharan and Kapil Bharati, Delhivery has strengthened its top management team, having roped in Sandeep Barasia as joint managing director. He had spent more than a decade at global consultancy Bain & Company, where he was a partner.
If successful, this will be the second fresh investment in India for Soft-Bank, which had closed a $238-million round in online insurance aggregator PolicyBazaar in June. Apart from that, SoftBank last month led a $1-billion funding round in OYO, a transaction that valued the Ritesh Agarwal-led hospitality company at $5 billion.
Source: Economic Times