FedEx invests $100 million in Delhivery, gets board seat
Under the commercial agreement, FedEx Express will focus on exports and imports, while Delhivery aids it on the domestic front.
Friday July 16, 2021,
2 min Read
FedEx Express, the air-delivery subsidiary of FedEx Corp, will invest $100 million in equity in India's logistics unicorn Delhivery, as the global delivery giant seeks to leverage the startup’s technology prowess to grow business in the country.
“India is a strategic priority for FedEx. This strategic alliance will support our long-term vision to grow our India business,” said Raj Subramaniam, President and Chief Operating Officer of FedEx Corp.
Don Colleran, President and CEO of FedEx Express, will join Delhivery's Board of Directors. Backed by Softbank SoftBank Vision Fund, and Tiger Global Management among other investors, Delhivery was valued at around $3 billion in June 2021.
The FedEx Express investment comes a few months before Delhivery’s initial public offering (IPO).
FedEx Express' operations in India include 38 weekly flights arriving in and departing from its three gateways, New Delhi (main hub), Bengaluru and Mumbai. It employs more than 6,000 persons in India.
According to the commercial agreement, FedEx will now focus on international export and import services to and from India. Delhivery will focus on selling FedEx Express international products and services in the domestic market, and provide pick-up and delivery services across India.
FedEx will transfer some of its domestic assets to Delhivery. The deal also helps the American multinational access Delhivery’s digital freight exchange platform, and its network of 18,700 pin codes in India.
Delhivery, headquartered in Gurugram, will get access to FedEx Express’s global network in 220 countries. It raised $277 million from American investment firm Fidelity in June. It has worked with 15,000 enterprise customers, including large and small e-commerce companies.
“Our aim is to bring new products and opportunities to Indian and global businesses and consumers, through unique access to our networks, and technology and engineering capabilities,” said Sahil Barua, CEO of Delhivery.
FedEx is revamping its brand name to evolve into a logistics company with a larger focus on digital. It changed its tagline to ‘FedEx. Where now meet next.’ earlier this year to highlight the evolution. "We will provide opportunities to develop product and technology solutions,” said Subramaniam, in a statement.
Edited by Kunal Talgeri