Ecom Express has been founded in 2012 by Manju Dhawan, K. Satyanarayana, Late T. A. Krishnan and Late Sanjeev Saxena. Ecom Express also offers a complete suite of supply chain, storage, and fulfilment solutions under its service line – Ecom Fulfillment Services and headquartered in Gurugram. Ecom Express is a full-stack, technology-driven logistics company. For the fiscal year ending March 31, 2024, the company reported revenue of Rs 2,607 crore ($314 million) from Rs 2,548 crore in FY23. Its losses shrank by 40% to Rs 256 crore in the same period. Delhivery Limited has announced the acquisition of a 99.4% stake in Ecom Express Limited, a rival logistics solutions provider, for a cash consideration of up to Rs 1,407 crore ($169.5 million).
This marks one of the largest consolidations in the logistics space. The deal is distressed, as Ecom Express had raised its last private funding at a valuation of Rs 7,300 crore. The acquisition amount indicates that the company’s valuation has nosedived by around 78% since its last fundraise. The rise of Valmo — Meesho’s internal logistics unit — significantly impacted Ecom Express, as Meesho previously accounted for more than 50% of its shipment volume. The acquisition deal was approved during a Board meeting held earlier today, with Delhivery confirming that a Share Purchase Agreement (SPA) has been signed with Ecom Express and its shareholders. Once completed, Ecom Express will operate as a subsidiary of Delhivery. The acquisition is aimed at driving scale, efficiency, and improved client service through investments in network automation, electric vehicles, advanced technologies including robotics and drones, and continued R&D.
Ecom Express had been aiming to go public at a valuation of $700 million. The company made several attempts to launch its IPO but deferred its plans multiple times for undisclosed reasons. However, it recently secured approval from the Securities and Exchange Board of India (SEBI) to proceed with the offering. Notably, Delhivery had previously alleged that Ecom Express presented misleading figures in its draft IPO documents. While it's obviously difficult to blame the current market turmoil for the deal, the fact remains that logistics firms have had their turn at access to risk capital, and now the backers have moved on. The industry is under pressure to deliver, Delhivery included. The current deal certainly looks value accretive for Delhivery, and if the actual merger goes well, stakeholders will have reason to be happy.