Flipkart to invest USD 40 million in last-mile delivery startup Shadowfax

Walmart-owned Flipkart is preparing for the festive period that sees increase in online sales across category

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Bengaluru-based e-commerce major Flipkart is in talks with last-mile delivery startup Shadowfax for a likely investment of around USD 40 million as it expects its online sales to go up during the three-month long festive period that would require more delivery executives.

If the deal goes through Shadowfax’s valuation would climb to nearly USD 200 million, two people familiar with the matter told local newspaper Economic Times.

Flipkart’s investment in Shadowfax will give the former an access to the additional fleet of delivery executives to ramp up its key business prospects such as grocery and medicine delivery.

“Flipkart has put in a term sheet and the due diligence is ongoing right now,” said one of the two people privy to the deal.

Flipkart has already invested in two logistics startups including online freight startup BlackBuck and locker provider QikPod. Apart from these investments, it owns Ekart, a logistics and supply chain company.

Shadowfax’s ownership pattern would also change if the Flipkart deal materializes considering that Eight Road Ventures with 37% stake is the largest investor in the company. Incidentally, Snapdeal’s co-founders Kunal Bahl and Rohit Bansal are also investors in Shadowfax.

Regulatory filings reveal that in fiscal year 2018, Shadowfax’s revenue stood at USD 10.9 million at a loss of USD 2.9 million. Shadowfax last raised USD 19.3 million at a valuation of USD 80.2 million in a round led by NGP Capital, International Finance Corporation, Mirae Asset and Qualcomm Venture.

Founded in 2015 by IIT Delhi alumni Abhishek Bansal and Vaibhav Khandelwal, Shadowfax is India’s first multi-modal B2B logistics platform which uses a combination of bikes, minivans, trucks and airlines to provide instant, same-day and next-day deliveries.

It claims to have operations in over 200 cities in India supported by 15000-plus delivery partners who enable more than 200,000 daily transactions. Shadowfax boasts of marquee clients like Amazon, Swiggy, Flipkart, BigBasket, MedLife, Paytm, among others including online and offline retailers. It competes with the likes of Delhivery, Rivigo, and Ecomm Express in a USD 1.35 billion e-commerce logistics space.