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SoftBank and Tiger Global-backed Delhivery buys US-based Transition Robotics ahead of IPO

Written by Moulishree Srivastava Published on     3 mins read

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In November, Delhivery filed draft papers with the Indian market regulator to raise USD 988 million (INR 74.6 billion) through an IPO.

Ahead of its initial public offering, SoftBank- and Tiger Global-backed Indian logistics unicorn Delhivery has bought a California-based unmanned aerial systems platform development company, Transition Robotics Inc (TRI), for an undisclosed amount.

With the acquisition of TRI—which has over ten years of experience in unmanned aerial systems, popularly known as drones, from hardware and software design to testing, validation, and manufacturing—Delhivery will get all of its registered IPs, which is expected to strengthen its capabilities in applications like aerial photography, remote sensing, inspection, and surveys, the company said in a statement on Wednesday.

“While we continue to build our supply chain platform, we must look at the long-term developments poised to shape the industry,” Kapil Bharati, chief technology officer at Delhivery, said. “Bringing TRI onboard gives us a chance to get directly involved with core drone technology as regulations and use cases for drones are evolving in the country.”

This is Delhivery’s third acquisition this year. In August, it bought smaller rival Spoton Logistics to strengthen its B2B operations and grab a bigger piece of the pie from the country’s USD 215 billion logistics market. Earlier in March, it scooped up Primaseller, a California-based SaaS company providing order management software for omnichannel retailers.

The acquisition comes two months after the Gurugram-headquartered startup refilled its coffers by raising over USD 200 million across two rounds from Addition, the American VC firm founded by former Tiger Global executive Lee Fixel.

Aside from SoftBank, which is the largest shareholder in Delhivery with a 22.78% stake, Tiger Global which holds 6.10% of the company, and Addition, which recently became a part of its cap table, Delhivery’s other marquee backers include stake Nexus Ventures Partners, Carlyle Group, Canada Pension Plan Investment Board, and Times Group.

In November, Delhivery filed draft papers with the Indian market regulator for a USD 988 million (INR 74.6 billion) IPO, which entails a primary issue worth INR 50 billion, and an offer for sale by the existing investors totaling INR 24.6 billion.

The company said it would utilize the net proceeds from the public issue in funding organic and inorganic growth through acquisitions and other strategic initiatives. As per the draft papers, the company will put aside INR 25 billion to fund its organic growth initiatives such as scaling up existing verticals, developing new business lines, and expanding network infrastructure. Meanwhile, it intends to use INR 12.5 billion to make strategic investments in other entities, which implies Delhivery plans to continue buying stakes in companies in logistics and adjacent sectors.

“We believe our core technology and expertise is a great addition to Delhivery’s fully-integrated approach to logistics and are looking forward to being a part of its future,” said Jeff Gibboney, the TRI co-founder.

Started in 2011 by Sahil Barua, Mohit Tandon, Bhavesh Manglani, Suraj Saharan, Kapil Bharati, and Bhavesh Manglani as an express delivery partner for restaurants, Delhivery shifted its focus to cater to e-commerce shipments within the first six months. Over the last decade, it has become one of the dominant players in the e-commerce logistics space, having completed over 1 billion shipments. The company now provides a full range of logistics services, including express parcel delivery, heavy goods delivery, cross-border deliveries, warehousing, and supply chain solutions. It claims to work with more than 21,000 customers, including e-commerce marketplaces, direct-to-consumer e-tailers, and enterprises and SMEs across FMCG, consumer durables, consumer electronics, lifestyle, retail, automotive, and manufacturing, serving about 17,000 neighborhoods across more than 2,500 cities.

According to Bengaluru-based consulting firm RedSeer, in the financial year ended March 2021, Delhivery was the largest and fastest-growing fully-integrated logistics services player in India by revenue. The company’s revenue stood at INR 38.38 billion in FY 2021, up 28.4% from a year ago. During the period, its net losses expanded 55% to INR 4.15 billion.

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