Gurugram-headquartered logistics provider Ecom Express is reportedly in the last phase of closing a USD 70.5 million funding led by UK-based development financial institution CDC, according to technology news portal VCCircle.
The deal is being reviewed by the Competition Commission of India, the report said.
Ecom Express had previously raised USD 30 million from Warburg Pincus in September 2017 at a valuation of USD 200 million, according to industry tracker Tracxn.
The capital raised will be used by Ecom Express to upgrade its technology by investing in artificial intelligence, machine learning and data science processes. “Our main focus continues to be on expanding our service lines, reinventing our network and operational processes through technology to align and better respond to industry expectations, and focus on making deeper inroads into inaccessible pin codes,” said K Satyanarayana, director and co-founder, Ecom Express to local paper Economic Times. Currently, the company claims it sends packages to over 26,000 pin codes across India.
The 2012 founded company has reported a 76% jump in total revenue to USD 143.5 million in financial year 2019 ended March, compared to USD 81.6 million in the previous financial year.
Although, it reported a net loss of USD 18.2 million, due to switching to the new Indian Accounting Standard (Ind-AS) in the last financial year, that classified the compulsory convertible preference shares (CCPS) worth USD 2.2 million as debt, the logistics firm, after adjusting the CCPS shares, reported a net profit USD 3.9 million in FY 2019, against a net loss of USD 10.4 million in the previous fiscal.
According to industry experts, though India’s GDP growth is slowing to 5%, the logistics sector will touch an 8% growth, which is still 2% lower compared to last year. According to a 2018 report by Deloitte, the logistics industry in India, will most likely reach a market size of USD 6.8 billion by 2022. As of now, the prime driver of the boom in the logistics sector is e-commerce activity, B2B delivery among small and medium businesses, and rising cross-border trade.
It is to be noted that there are only a handful of delivery companies in India like the SoftBank-backed Delhivery, Ecom Express, Alibaba Group-backed-Xpressbees, GoJavas, and Shadowfax, which have exclusive supply chain solutions for e-commerce.