Friday 6 December 2019

Flipkart leads $60 million round in logistics startup Shadowfax

Flipkart leads $60 million round in logistics startup ShadowfaxBENGALURU: Walmart-owned Flipkart has led a $60 million (about Rs 429 crore) investment round in logistics startup Shadowfax, as India’s largest online retailer looks to add to its last-mile delivery capabilities.

Eight Roads Ventures, the venture capital arm of Fidelity, Nokia Growth Partners, Qualcomm Ventures, Mirae Asset Naver Fund, and World Bank-backed International Finance Corporation (IFC) also participated in the Series D fund raising round.

In its August 30 edition, ET was the first to report that Flipkart was likely to back the logistics startup, its third investment in the logistics space after earlier investing in trucking platform BlackBuck and locker provider QikPod.

The companies did not disclose the transaction value, but sources briefed on the matter told ET that the investment valued Shadowfax at about $200-$250 million, and is also likely to see other new investors join in.

"We will continue to invest in asset-light technologies like bringing Kirana on the platform to enable low cost and high NPS (net promoter score) for our clients... as well as invest into large distribution centers across the top 10 cities to enable backward integration and provide end-to-end service to our clients," Abhishek Bansal, CEO, Shadowfax told ET.

Shadowfax has grown by 3X in the last 15 months. "We believe, considering the depth of the India market and potential, we can grow 10X in the next 4 years and take the company public," Bansal said.

Investing in the Bengaluru-headquartered logistics company will give Flipkart access to technology and additional fleet to boost strategic initiatives like hyper-local grocery and pharma delivery while building capabilities for other on-demand logistics use cases in top cities.

Shadowfax runs a technology platform that connects delivery executives to ecommerce companies and small and medium businesses.

“We have seen strong synergies with Shadowfax through our existing engagement with them, and their investments in tech-enabled innovations will help us significantly reduce delivery time and provide superior customer experiences across product categories,” said Kalyan Krishnamurthy, CEO, Flipkart Group.

Shadowfax last raised Rs 138 crore at a valuation of Rs 573 crore, led by NGP Capital, IFC, Mirae Asset, and Qualcomm Ventures.

The four-year-old company’s largest investor is Fidelity International with about 37% stake. It has since been aggressively beefing up its leadership team. In May, Shadowfax appointed former Myntra top executive Shamik Sharma as an independent director.

Founded in 2015 by IIT Delhi alumni Abhishek Bansal and Vaibhav Khandelwal, Shadowfax counts all e-commerce majors as clients, including Amazon, Swiggy, BigBasket, Nykaa, and Paytm. The company offers hyper-local, same-day and next-day delivery services and is present across more than 150 cities and towns.

Flipkart already owns Ekart, a logistics and supply chain company that delivers shipments across 3,800 pin codes.

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