Alibaba backed startup competes with Flipkart-owned Ekart, SoftBank-backed Delhivery, Warburg Pincus-funded Ecom Express and Flipkart-backed Shadowfax.
Chinese e-commerce juggernaut Alibaba, which backed Pune-based logistics startup Xpressbees with $35 million in January last year, is looking to enhance its stake in the company. The tech major is now putting $10 million more in it, according to the regulatory filings by the company. “This investment appears to be an extension of the Series D round raised by XpressBees in 2017,” business signals platform Paper.vc said in a note. Xpressbees had also raised $5 million in venture debt from InnoVen Capital in February this year. The company competes with Flipkart-owned Ekart, SoftBank-backed Delhivery, Warburg Pincus-funded Ecom Express and Flipkart-backed Shadowfax.
“The company requires additional funds for the growth and expansion of its business,” the company said in the filing, adding that “it is proposed to raise the capital (Series D1 compulsorily, convertible, cumulative, non-participating preference shares — CCPS) by preferential allotment of shares to Alibaba.com Singapore E-Commerce Private Limited “Proposed Investor”.” The company will issue 9,317 CCPS.
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The e-commerce retail logistics sector was worth $35 billion in 2018 and would grow 36 per cent in the following five years, according to a KPMG and CII report. Currently, Delhivery is the biggest player in the sector valued at over $1 billion — the first unicorn in logistics technology space and unlike other markets such as food tech, e-commerce etc, won’t be the winner-take-all-market. “I don’t think it’s a winner-take-all market. In the venture space, there are a few companies that get a lion’s share of mind with investors and, therefore, a lion’s share of the money. When a lot of money chases a limited number of deals, it is inevitable that a few companies raise a lot of capital, as has happened in the e-commerce and other spaces as well,” Devangshu Dutta, CEO at retail consulting firm Third Eyesight had told Financial Express Online.
Xpressbees is among the leading Indian startups backed by China’s top two corporate — Alibaba and Tencent that have poured billions of dollars and helped many of them turn unicorns. While Alibaba has backed Paytm, Snapdeal, BigBasket, Zomato; Tencent has invested in Hike, Flipkart, Byju’s, Ola, Swiggy, Dream11, Udaan etc.