An interesting Logistics startup announced the eighth Indian unicorn startup of the year 2022
So excited to tell you, we have the 8th unicorn startup of the year and in a different domain which is logistics.
Let us talk about logistics industry and unicorn startups. Defining what logistics is, can be referred to as the overall process and way of managing how resources are acquired, stored, and transported to the final destination. Logistics define the way how a business is able to conduct its operations, a poor logistics has a very negative impact on the business line.
The biggest logistic companies in our country are-
Aramex Logistics Company
BlueDart Logistics Company
DHL Logistics Company
Safexpress Logistics Firm
Talking about the logistics industry of the world, the value of the industry was USD 7641.20 billion in the year 2017 and is expected to grow at a CAGR of 6.5% and reach USD 12975.64 billion by the year 2027. The COVID 19 had a very bad impact on the logistic industry. The restrictions related to travel, night curfews, the closing of borders, and the flights being canceled, declined the logistic industry.
The key end-users of the logistics industry are the following domains-
Healthcare, Manufacturing, Aerospace, Telecommunication, Government and Public Utilities, Banking and Financial Services, Retail, Media and Entertainment, Technology, and Trade and Transportation. There are four modes of transport included in the logistics industry, which are Railways, Airways, Roadways, and Waterways.
The key regions of the logistics industry are-
North America- US, Canada, and Mexico
Europe- UK, Germany, France, Spain, Italy, Rest of Europe
Asia-Pacific- China, Japan, India, Australia, Rest of Asia-Pacific
LAMEA- Latin America, Middle East, Africa
Now coming to the Indian logistics industry, the value of the industry as of August 27, 2021, is USD 160 billion and is the source of employment to more than 22 million people. The market value of the industry is expected to grow at a CAGR of 10% and reach USD 215 billion by the year 2022. One of the major reasons for the increase in the market value of the industry is the infrastructure of our country is booming.
The aim of the National Highways Development Project is to expand the current expressway network of the country of 2000 km and has the plan to add 18637 km of greenfield expressway by the year 2022. The Brahmatala Project has the mission to construct 83677 km of the highway by the year 2024. The logistics industry is the contributor to around 14% of the GDP of the country. If we look at the future of logistics in the country, the air industry is changing positively. Even the use of technology is increasing, thus the industry is expected to be organized and technology-driven in the coming future.
Now if we talk about unicorn startups, we all know what a unicorn startup is! It is a privately held business entity the value of which is more than USD 1 billion. The term Unicorn startup for the first time was given by Aileen Lee, who is a venture capitalist and the founder of Cowboy Ventures.
The reason for giving the term unicorn startup was because of very few startups of such value were present at that time. A unicorn startup is one that has a great, different, and innovative idea. It has the first-mover advantage and brings something new to the market. It brings a solution to the problem that is long there in the market but no one has ever catered to.
The year 2021 performed amazingly well when it comes to the topic of unicorn startups. We had almost more than 3 startups every month earning the status of unicorns. The year 2022 is also showing itself to be good till now. We are not even in the mid of February and we are here to talk about the 8th unicorn startup of the year. Let us now discuss the announcement of the new unicorn startup that has taken place recently.
And surprisingly just before this announcement, a day before, a home decor and renovation startup had converted into a unicorn startup. The startup, Livspace had raised funds worth USD 180 million. That round of funding was the late-stage round of funding and the investors in that round of funding were KKR and Co, Ikea, Jungle Ventures, Venturi Partners, and many more. The value of Livspace after this round of funding had increased to USD 1.2 billion, thus becoming a unicorn.
Announcement of a new unicorn logistics startup
The startup, Xpressbees has raised funds worth USD 300 million, as announced on February 10, 2022. This round of funding that we are discussing is the Series F round of funding and was led by Blackstone Growth, TPG Growth, and ChrysCapital. The funds raised have been divided like this- USD 100 million in primary and USD 200 million in secondary, in order to give partial exit to Alibaba and full exit to one Chinese investor who has not been specified.
The other investors who took part in this round of funding were the existing investors of the startup, which were Investcorp and Norwest Venture Partners. The financial advisor of this transaction was Avendus Capital.
The startup plans to use the funds raised in converting itself into a full-time logistics company. The startup also plans to use a portion of the funds raised in the product development and hiring of new talent. The startup believes that since it has now new investors on board, it will be able to look into more opportunities and expand the footprint of the startup.
The total funds raised by the startup after this round of funding have come up to USD 575.8 million. The value of the startup after this round of funding has increased to USD 1.2 billion, thus the startup is the 8th unicorn startup of the year 2022.
About the newly turned unicorn logistics startup
The startup, Xpressbees was launched in the year 2015 by Supam Maheshwari, who is also the founder of Saha and Firstcry, and has its headquarters in Pune, Maharashtra. The startup is the fastest growing express logistics service provider in the country meeting the needs to end-to-end supply chain solutions. The tagline of the startup is Delivering Happiness!
Talking about the journey of the startup, it is as follows-
In the year 2015, the startup was launched and it was delivering 50000 shipments a day
Then in the year 2017, it evolved into a major e-commerce player with express logistics services expanding to 500 cities. Alibaba invested USD 35 million in the startup. The startup at that time was delivering 150000 shipments a day.
Then in the year 2019, the startup evolved into a full-blown logistics solution provider with strong capabilities in Cross-Border, Warehousing, and Transportation. The startup at that time was delivering 600000 shipments a day.
Then in the year 2020, the investors Investcorp, Norwest Venture Partners, and Gaja Capital together invested USD 110 million, which is equivalent to INR 800 crore. The investors in turn took a 31% stake in the startup.
Then in the year 2021, the startup is handling shipments of more than 3 million every day.
The startup is engaged in helping more than 1000 customers including big names like Paytm, Meesho, Lenskart, Xiaomi, NetMeds, Snapdeal, and many others, and has its presence in more than 3000 cities. The biggest competitor of the startup is Delhivery, which in November 2021 has filed for an IPO worth USD 1 billion. The investors of Delhivery are FedEx, SoftBank, and Tiger Global. Xpressbees has more than 100 hubs across the country, 10 lakh square feet plus warehouse capacity, and is operating across 52 airports in the country.
The unicorn startup is growing and reaching every corner of the country. We wish the startup a stroke of good luck and hope it has a bright and successful future ahead!
Edited and published by Ashlyn Joy