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Alibaba infuses USD 10 million in portfolio company Xpressbees

The Chinese internet giant had picked up a stake in Xpressbees with USD 35 million Series D investment in December 2017.

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In what may be one of the last investments in India this year for Alibaba, the Chinese internet giant has infused USD 10 million in its logistics portfolio company, Xpressbees.

The Pune-based startup passed a board resolution on December 16 to issue 9317 Series D preference shares at a price of USD 1073.30 per share to Alibaba, which makes it a USD 10 million deal, local media reported citing a note from Paper.vc, a data platform for business intelligence.

“The company requires additional funds for the growth and expansion of its business,” XpressBees said in the regulatory filing.

Paper.vc observed in its note that “this investment appears to be an extension of the Series D round” raised by XpressBees two years back. Alibaba had picked up a stake in Xpressbees with USD 35 million Series D investment in December 2017.

A report by local media Inc42 said Xpressbees had increased its authorized share capital last month to make up for the lack of funds required to fuel its growth. Prior to that, the company also raised USD 5 million in venture debt from InnoVen Capital in February.

The four-year-startup, founded by Amitava Saha and Supam Maheshwari, competes with Warburg Pincus-backed Ecom Express, SoftBank-backed Delhivery, and Flipkart-backed Shadowfax, all of which offer last-mile delivery services to e-commerce companies.

Earlier this month, Gurugram-based Ecom Express raised USD 36 million from CDC Group, the development finance arm of the UK government, while Bengaluru-based hyperlocal delivery startup Shadowfax received USD 60 million from Walmart-owned Flipkart.

The year 2019 has been quite eventful for the logistics sector, with all the major startups raising money. The last-mile delivery services in the country have been revving up their infrastructure capabilities as they look to grab the growing demand from the USD 30 billion-plus e-commerce market, as well as tap new opportunities including e-groceries and online B2B retail in the country.

Some of the top deals in the space this year include Delhivery which raised USD 413 million from Fosun Group, SoftBank Corp, and US-based PE firm Carlyle Group; Blackbuck’s USD 150 million funding from Light Street Capital, Wellington Management, Accel USA, Sequoia Capital India, IFC, and Goldman Sachs; and Rivigo’s USD 70 million investment from KB Investment, Warburg Pincus, and SAIF Partners.

In fact, the investment in such startups this year has more than doubled to USD 1.04 billion across 29 deals as compared to 2018 when logistics firms raised USD 438 million in about 30 funding rounds, data from Venture Intelligence shows.

Over the last few years, last-mile delivery startups have grown rapidly on the back of B2C e-commerce. As per the research firm Forrester, India has about 110 million online shoppers currently, and another 150 million potential customers from tier 2 cities and beyond are expected to join the party over the next few years. A recent report by the consulting firm RedSeer said online retail is expected to reach USD 46 billion in 2020, accounting for 4.6% of the total USD 1 trillion-retail-opportunity in the world’s second-most populous country.

Meanwhile, an April 2019 report by Kalaari Capital said the market size of the Indian logistics sector is poised to touch USD 650 billion by 2025 from USD 340 billion in 2017.