Canada’s biggest pension fund invests in Indian logistics unicorn Delhivery

CPPIB is shifting its focus from traditional businesses to emerging online companies.

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Canada Pension Plan Investment Board (CPPIB) Monday said it had bought 8% stake in India’s unicorn logistics company Delhivery for USD 115 million from an existing investor, without revealing the name.

Post the investment—approved by India’s anti-trust body Competition Commission of India—CPPIB has secured a seat on Delhivery’s board.

Citing an unnamed source, Mint a local newspaper said CPPIB invested in Delhivery at a valuation of USD 1.5 billion—estimated to be the same as its last funding round in March earlier this year.

“The continued strong growth of e-commerce has generated significant opportunities in India’s express logistics space for long-term investors such as CPPIB, and we are pleased to partner with a market leader,” Deborah Orida, CPPIB’s senior managing director and global head of active equities, said in a statement.

Canada’s largest pension fund, CPPIB invested in the Delhi-based logistics company through its subsidiary Fundamental Equities Asia Group, which invests in Asian companies for the long term. In the past it has invested in Kotak Mahindra Bank, Tencent, Alibaba Group, Larsen & Toubro, Ant Financial and Samsung Electronics.

As India’s digital economy opens up and increasing number of technology startups in various sectors including healthcare, finance, mobility, e-commerce, logistics among others emerge with workable solutions, CPPIB is changing its focus from brick-and-mortar companies to target emerging sectors in the digital space.

It participated in India’s online education company—also a unicorn—Byju’s USD 300 million funding round in December last year. For the first half of this year, CPPIB has invested a total of USD 7.5 billion in India.

According to Alain Carrier, CPPIB’s head of international operations, India contributes to 2% of CPPIB’s portfolio.

“We do not want to box ourselves in with specific targets, but as our fund sizes grow, India will continuously see more deployment and outlay. In emerging markets such as India, we prefer partnering with a local player or backing the right management team. This will continue to be a dominant theme, though we may make a few exceptions,” Carrier told a local newspaper Economic Times.