Canada Pension Plan Investment Board (CPPIB) is in the process of making a $150-million (Rs 1,040-crore) secondary market investment in new-age logistics company Delhivery, underscoring the rising interest of investors in a clutch of growth-stage tech firms.
CPPIB, one of the world’s largest retirement funds, is buying the shares from homegrown private equity firm Multiples Alternate Asset Management, said two people familiar with the deal’s details. Venture capital firm Nexus Venture Partners, an early investor in Delhivery, may also liquidate some of its shareholding.
“The secondary stake sale is likely to be completed after the approvals are in place, valuing Delhivery at $1.5 billion,” said a person close to the matter.
The deal will see CPPIB, which manages $392 billion in assets, pick up a stake of about 8% in the Gurgaon-based company, sources close to the matter told ET. Delhivery already counts heavyweights such as SoftBank Vision Fund, private equity firm Carlyle Group and Chinese conglomerate Fosun International among its backers. Times Internet, a part of the Times Group, which publishes ET, is also an early investor in the company.
A CPPIB spokesperson declined to comment. Multiples and Delhivery didn’t respond to queries. The Renuka Ramnath-led Multiples first invested in SSN Logistics, which runs Delhivery, in a $35 million financing round in 2014, and is expected to clock handsome returns after two sets of secondary deals by the PE firm.
Second Investment in Tech Startup
In 2015, the Mumbai-based fund sold a 10% stake in the logistics company to Tiger Global.
CPPIB’s investment in Delhivery marks its second investment in the Indian startup space after having participated in the $322 million funding round of ed-tech venture Byju’s in December last year.
The pension fund, the largest in North America, has been increasingly focusing on emerging markets, and was reported to have allocated about C$8.2 billion, or 2% of its overall global fund exposure, to Asia’s third-largest economy.
Delhivery, founded in 2011 by Sahil Barua, Mohit Tandon, Bhavesh Manglani, Suraj Saharan and Kapil Bharati, raised more than $400 million in its latest round of equity financing which was led by SoftBank Vision Fund, propelling it into the unicorn club, comprising privatelyheld companies with a valuation of $1billion or more. SoftBank holds a 22.4% stake in the company. The logistics company has been moving away from its dependence on ecommerce by diversifying into areas such as cross-border, businessto-business logistics, among other areas. While the sector has seen significant growth, the captive logistics units of the two biggest ecommerce platforms —Flipkart’s Ekart and Amazon’s ATS — control 50% of the market and are investing heavily to scale up further. On top of that, the share of third-party logistics in ecommerce has been declining.
Delhivery now provides the full suite of logistics services, including express parcel transportation, freight, reverse logistics, cross-border, business-to-business, business-to-consumer, warehousing and technology services, and says it processes more than 500,000 parcels a day across 450 million transactions to date. For fiscal 2018, the company reported revenue of ₹1,070.80 crore, up almost 43% from the year ago. Losses, however, widened by 8.5% to ₹684.45 crore over the same 12-month period, according to documents filed with the Registrar of Companies and accessed by business intelligence platform Tofler.