SISA Group plans to raise Rs 50 crore to fund its ecommerce logistics foray

SISA Group, a company which is involved in security services, is raising Rs 50 crore in its second round of equity funding as it diversifies into the ecommerce last-mile logistics space but will focus only on large heavy couriers.

The fund would be deployed for national expansion. The Surat-based security firm, founded by Major SK Sharma, a war veteran who fought the most famous 'Battle of Longewala' is engaged in manned guarding, cash handling vans, emergency response services and electronic security .

It had earlier raised Rs 11 crore from Canbank Ventures Capital Fund in 2015 to scale up its security business. Recently, SISA entered into last-mile logistic for ecommerce players like BigBasket, Flipkart, Snapdeal, Amazon and Grofers. Initially starting from Gujarat, now it has deployed more than 250 vans across the country.

Sharma said, "The ecommerce logistic business is profitable from the first month with no cash burn."

As per a KPMG 2016 report, the Indian ecommerce market is estimated at USD 27.5 billion in 2016 and is expected to grow at a CAGR of 31 percent to touch USD 80 billion by 2020. Out of the total ecommerce market, 50 percent is ecommerce retail that stands at USD 6.7 billion.

The ecommerce retailing industry is witnessing approximately 1 to 1.2 million shipments a day. He also said that the ecommerce logistic business is doing a run rate of 1crore a month from the first month and growing exponentially. However, SISA would only cater large or heavy couriers like TV, laptops, refrigerator or any item that are heavy and or need to be delicately handled.

"We won't be in the small courier delivery space," said Sharma.

According to Sharma, the funds raised would be mainly used for expanding its ecommerce last-mile logistic services across India and a small portion for its existing security business.

"Ecommerce players are now focusing on specialised deliveries. Thus 3PLs (third-party logistics) need to build new capacities," said Sharma.