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FedEx pumps $100 Mn equity investment in IPO Bound Delhivery

American logistics giant FedEx announced on Friday that it has entered in equity and commercial agreement with India’s homegrown logistics startup Delhivery. The agreement would allow both companies in leveraging their combined strength to unlock the potential of India’s international trade.

As part of this agreement, FedEx will make $100 Mn equity investment in Delhivery. This investment will be channeled through FedEx’s subsidiary firm FedEx Express. FedEx Express’s President and CEO Don Colleran will also be nominated to Delhivery’s board of directors team.

It is not clear that whether the $100 Mn investment will be made through several tranches or single tranche. The company has maintained silence over its post-funding valuation. The Delhi based startup had sought a $3 Bn valuation during its previous fund raising round that fetched $227 Mn equity investment.

This investment that is inclusive of commercial agreement is most likely to benefit Delhivery in the long run. FedEx’s brand equity in international logistics including in air cargo space will bring a different dynamics for Delhivery.

Among many things agreed in the commercial agreement, Delhivery will sell FedEx Express international products and services in the international market. It will equally provide pick up and drop services to FedEx in India.

The latest investment will also assume more importance in the run up to its much anticipated IPO next year. Delhivery’s long term commercial agreement with international logistic delivery brand like FedEx is expected to send a positive vibe in the investment community.

The Delhi based startup is among the slew of Indian startups that is looking to list itself in BSE and NSE. The Indian startup industry is currently basking under the apparent success of Zomato’s IPO. The positive thing about Delhivery ahead of its IPO is that it has managed to narrow down its loss quite significantly.

The company clocked a loss of INR 284.13 Cr on the back of INR 2,896 Cr revenue in FY20. In FY 19, its cumulative loss stood at around INR 1,781 Cr.

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