Ecom Express has recently raised a mammoth Rs 850 crore in fresh funding from global private equity firm Warburg Pincu.
E-commerce-centric logistics solutions provider Ecom Express has recently raised a mammoth Rs 850 crore in fresh funding from an affiliate of global private equity firm Warburg Pincus, as investors continue to back ventures providing services to online retail companies.
While the exact terms of the transaction were not disclosed, the capital commitment is the latest deal in the logistics solutions segment. It is yet unclear, whether existing private equity backer, Peepul Capital, also reportedly the majority stakeholder in Ecom Express, has also participated in the new round.
In May, global investment firm Tiger Global, which has strongly backed a number of consumer internet ventures in India, led an $85 million (Rs 542.4 crore) round in Delhivery, reportedly valuing the five year-old company close to Rs 2,000 crore.
"There is a significant need for logistics capacity in India to serve the requirements of the e-commerce industry, and businesses are seeking reliable service providers who can scale up with them," said Viraj Sawhney, managing director, Warburg Pincus India.
Ecom Express will use the proceeds from the latest round to expand its delivery footprint in tier 3 and 4 towns and cities. It also plans to invest further in technology, deploy advanced parcel sortation systems, and strengthen network reliability and infrastructure, among others.
"These initiatives will help us deliver superior customer experience and build a scalable business. We look forward to leveraging Warburg Pincus' domain expertise in logistics and the firm's global network of relationships," TA Krishnan, chief executive of Ecom Express.
Founded in 2012 by Krishnan, Sanjeev Saxena, K. Satyanarayana and Manju Dhawan, all of whom have deep expertise in courier and logistics industry, Delhi-based Ecom Express claims to service more than 2,800 pin-codes through more than 320 delivery centers and 8,000 employees in about 210 cities. It also expects to handle about 50 million packages this year.
"We are excited to partner with a highly-regarded management team with deep domain expertise, in a sector with significant growth potential," Sawhney said.
Logistics solutions companies, particularly those catering to the e-commerce sector, have scaled at a rapid pace, driven by the growth and acceptance of online retail in the country. While India's e-commerce sector is currently estimated at $3 billion, and is just about 1% of the overall retail segment, industry experts have said it will touch $43 billion by 2019.
Ecom Express has a stated objective of servicing over 10,000 pin codes covering more than 1,500 towns and cities, across the country, over the next few years.
It raised about Rs 75 crore from mid-market private equity firm Peepul Capital in September last year.
Separately, the Ecom Express investment marks the latest deal for Warburg Pincus in India, which has, once again picked up its pace of investments in the country, after a relatively slow couple of years.
In 2014, the marquee PE firm invested $413 million in seven companies - including, auto portal CarTrade.com, Laurus Labs and Kalyan Jewellers.
In April this year, it reiterated its commitment to India's consumer internet ventures, after it participated in online and mobile classified company Quikr's latest round of funding, which saw the company raise $150 million from existing and new investors.
As a per news reported by Et retail.
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