Delhivery secures $100 mn from FedEx subsidiary ahead of IPO

FedEx Express, a subsidiary of global delivery services giant FedEx Corp, has pumped in $100 million in homegrown logistics and supply chain startup Delhivery. 

The company has entered into equity and commercial agreements with Delhivery, that will utilise their combined strengths to unlock India's international trade potential, FedEx Express said in a statement announcing the deal on Friday. 

It is the first such strategic capital to be infused into the homegrown startup that is likely to hit the public markets by early 2022. Completion of this transaction is subject to closing conditions, including regulatory approval, the statement further read.

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"India is a strategic priority for FedEx. This strategic alliance will support our long-term vision to grow our India business and serve customers seeking to expand in or enter the Indian market, as well as provide opportunities to develop product and technology solutions together with Delhivery for the benefit of our customers," said Raj Subramaniam, President and Chief Operating Officer of FedEx Corp.

As part of the collaboration, FedEx will make a $100 million equity investment in Delhivery, and the companies will enter into a long-term commercial agreement. FedEx Express will focus on international export and import services to and from India, while Delhivery will, in addition to FedEx, sell FedEx Express international products and services in the Indian market and provide pick-up and delivery services across India. FedEx will also transfer certain assets pertaining to its domestic business in India to Delhivery.

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Commenting on the announcement, Sahil Barua, co-founder and Chief Executive Officer, Delhivery, said, "We are excited to partner with FedEx and look forward to the synergies created between Delhivery's capabilities in India and FedEx's global network. Our aim is to bring new products and opportunities to Indian and global businesses and consumers through unique access to our networks, and our technology and engineering capabilities."

Additionally, Don Colleran, President and CEO of FedEx Express, will be nominated to join the Delhivery Board of Directors as a further sign of collaboration between the two companies.