Delhivery- The Leading Logistics & Supply Chain Start-up of India!

1. Overview

Logistics is a key aspect to be managed to ensure the well-being of any economy including India. Since more and more retail businesses are going online, the scope & demand for logistics management is higher than ever as businesses need to ensure that customers receive their product orders on time to thrive amid stiff competition.

Therefore, Delhivery came into being to resolve the problem of logistics faced by countless businesses and soon tuned out to be the ‘backbone for the logistics & supply chain industry in India.Founded by a group of three close investors namely- Sahil Barua, Mohit Tandon, Bhavesh Manglani, and Kapil Bharati in May 2011 as SSN Logistics Pvt. Ltd. Delhivery is the fastest-growing fully-integrated & leading logistics player in India that offers a variety of logistics services including last-mile delivery, third-party and transit warehousing, reverse logistics, payment collection, vendor-to-warehouse, vendor-to-customer shipping, etc. among others.

The start-up has its headquarters in Gurugram, Haryana with a wide network of business presence all over the country servicing over 18000 pin codes. 21 automated sort centers, 122 gateways, 93 fulfillment centers, 2521 direct delivery centers, and a growing team of 86000 employees.

After raising funding for a sum of $413M in a Series F round led by SoftBank Vision Fund, Carlyle Group, and Fosun International, the start-up turned into a unicorn reaching a valuation of $1.5B and is currently valued at $4.77 B. Read further to find out more about Delhivery, its vision, start-up story, founders & the team, business & revenue model, Founders& Team, partnerships & competitors, and many more.

2. Delhivery – Mission & Vision

The logistics industry in India is valued at around $160B billion and is further estimated to grow by an expected CAGR of 10% and reach $215 billion within the next two years. But, before Delhivery came the logistics industry in India was largely unorganized. Therefore, Delhivery came as a phenomenon that has revolutionized the industry to make it organized and tech-oriented for faster & efficient deliveries.

Delhivery is on a mission to simplify and speed up the movement of goods. With its tagline ‘Delhivery-Small World’, this logistics unicorn aims to transform the existinglogistics market and make the world smaller with its faster delivery services. Alternatively, Delhivery targets to become the ‘leading operating system for commerce in India with the adoption of the world-class infrastructure in logistics operations of highest quality and cutting-edge engineering and technology capabilities’.

3. Delhivery-How does it works?

As provided above, Delivery is a logistics and supply chain solution and most recently has become a prominent courier services start-up whose services include an array of services such as fulfillment (warehousing), storage management, omnichannel, as well data services, etc. to individuals and businesses which includes some of the largest e-commerce businesses as well as SMEs that have partnered with Delhivery for its Shipping and Logistics services.

The online platform of Delhivery creates a connection between the consignors, agents, and truckers offering road transport solutions. On receipt of bookings of consignments, Delhivery collates all products from various sources at a fulfillment center where the products are sorted and packaged as per their destination, connected to their destination network city/place, and finally dispatched to be collected by delivery executives.

To ensure its efficient & timely services, Delhivery uses advanced technologies that help it to monitor, understand and automate tasks, and processes that make it repeatable and efficient.

Further, the Delhivery platform has recently introduced Consumer-to-Consumer (C2C) express parcel service, which allows a consumer to book his parcel online and get the parcel picked up at a scheduled time slot from his doorstep to any other place in India with no additional charges for pick-up facility. This service has also been expanded to up to 2,500 cities in India.

Therefore, with its technical capabilities, proprietary network design, infrastructure, partnerships, engineering, and technological capabilities Delhivery is disrupting India’s logistics industry.  Through this, it intends to build a sense of trust and improve the lives of the consumers, small businesses & bigger enterprises, and their growing team of employees and business partners.

4. Delhivery- Founders & Team

i) Sahil Barua(CEO & Co-founder)

Sahil Barua is the CEO & Co-founder of Delhivery who pursued his Bachelor of Engineering from NIT Karnataka and went on to pursue a PGDM degree from IIM Bangalore. After working at Bain & Company as a consultant for a while, he decided to start his entrepreneurial journey with Delhivery with the other founders.

ii) Kapil Bharati(CTO & Co-founder)

Kapil Bharati is another co-founder & Chief Technical Officer at Delhivery. He completed his Bachelor in Mechanical Engineering from IIT Delhi. He went on to work as the Technical Lead at Hindustan Times for Livemint.com and Senior Manager, Technology for SapientNitro. He also co-founded two more start-ups namely-11Rupees and Contify.com before co-founding Delhivery.

iii) Bhavesh Manglani

Bhavesh Manglani is another co-founder of Delhivery. He completed his Bachelors in Information Technology from the Dhirubhai Institute of Information& Communication Technology and a PGDM/MBA in systems/Finance from IIMCalcutta. Before joining Delhivery, Bhavesh worked as a Manager (Usage & Revenue Enhancement) Prepaid Mobile, All India, and a Product Manager at Reliance Communications and Idea Cellular Ltd and played a key role in the growth of Delhivery’s business operations. However, he exited from Delivery on March 29, 2021, before its IPO, and has been classified as a non-active promoter in Delhivery.

iv) Mohit Tandon

Mohit Tandon is another co-founder of Delhivery who left the start-up on March 29, 2021, along with another co-founder Bhavesh Manglani. He is an alumnus of IIT Kanpur and worked at Bain & Company as a Consultant for close to five years before joining forces with others co-founders to start Delhivery.

v) Suraj Saharan

Suraj Saharan is another co-founder who is an alumnus of IIT Bombay where he completed his graduation in Bachelors of Technology in Mechanical Engineering and went on to work as a Customer Service Manager at ICICI Lombard and as a Consultant with Bain & Company consultant and as a Director at DHL Express before co-founding Delhivery.

vi) Other Key Members

Suvayu Ali (Data Scientist at Delhivery) and Santanu Bhattacharya, are the other key members of Delhivery who have specialized skills and experience in Data Science. Delhivery had a special project run by a special team of data scientists who worked to increase the quality of products being delivered through the start-up, for which Suvayu Ali ran a special check on the market for technical matters with an algorithm under the guidance of former entrepreneur and Facebook’s data scientist Santanu Bhattacharya.

5. Delhivery- Start-up Story

On a fateful day, Sahil Barua and Suraj Saharan had ordered a meal online from a nearby restaurant in Gurgaon at 11.30 at night. When the delivery man reached the venue, they spoke with him at length, who told them that the restaurant was going to close soon leaving him unemployed. Hearing this, both the co-founders rushed to the restaurant to talk to the restaurant owner, who told them “that he was closing the business soon and was planning to relocate his staff somewhere else”.

Sahil Barua says “Most of the e-commerce businesses at that point had either their delivery arms or they were dependent on courier companies who were focused towards either delivery in bulk or document deliveries. None of these was designed to handle faster delivery of parcels and handing payments was imperative. These were the most interesting problems one could think of. “Hence, Sahil Barua and Suraj Saharan quickly decided to resolve this problem and immediately hired all the delivery staff at that restaurant. Thus, Delhivery was born.

Slowly, the other co-founders Mohit Tandon, Bhavesh Manglani, and Kapil Bharati also joined the team as they built a network for food deliveries that could reduce the time for food deliveries within a span of half an hour. But in the process, they also observed the key aspect of logistics & supply chain that was disregarded by other leading players in the market was- no one understood thestark difference between traditional and e-commerce delivery, which left a huge scope for delivery services within the e-commerce industry. Therefore, they shifted their focus from the e-commerce segment to getting hyperlocal later.

6. Delhivery- Growth & Revenues

   Despite a long series of lockdowns during the pandemic, Delhivery is one of the few start-ups that managed to grow steadily and maintain its demand as more and more businesses now want to work with more organized logistics businesses. Sahil Barua says “During the pandemic era, there was a rise in demand for organized logistics businesses by e-commerce companies, which has led to the growth of Delhivery”. The existing e-commerce businesses were facing three challenges at that point-

   • Long Delivery Times involved;
   • Lack of any real-time visibility on package deliveries;
   • Long Cash Delivery Cycle, as existing solutions took up to 30 days to return the payment collected from customers to e-commerce companies.

   Delhivery resolved all these three problems by developing a delivery network starting from major cities in India gradually on a Pan India basis, developed a decentralized model for its distribution centers instead of traditional delivery methods that reduced delivery timings from 4-7 days to 24 hours for deliveries. It also allowed visibility to other e-commerce players through the use of technology and even went on to build an online payment system that reduced the cash delivery cycle to up to 5 days.

   In the beginning, Delhivery adopted a slowly scaling philosophy by getting its fundamentals right. It took them 12 months to start their first distribution center and the next distribution center was built in the next two months. Once Delhivery had created the distribution center launch playbook, it was able to launch newer ones within 3 to 5 days.

   As customers grew, Delivery focused on expanding its services extending to other logistics-related services like warehousing, transportation services, and cross-border logistics. Although Delhivery has primarily been in the logistics business for the last ten years, they have also recently launched customer-to-customer parcel delivery, wherein any individual looking to send any parcel across any part of the country may access the Delhivery platform, book courier services at any convenient time, after which the parcel will be picked from his doorstep.

   Furthermore, Delhivery widened its business offerings in the year 2013, by selling technology that manages the supply chain for an online retailer business like an order management system, which makes it a Logistics as well as a Supply chain enabler business.

   Thus, the Delhivery platform has come a long way with a diverse base of 23600 active customers like e-commerce marketplaces, direct-to-consumer e-commerce players, and enterprises and SMEs across various business verticals such as FMCG, and consumer durables, electronics, lifestyle, retail, automotive and manufacturing.

   Delhivery boasts of a collection of 93 packing warehouses overall the country with 21automated sort centers, 75+ hubs, 7500+ partner centers, and a growing team of 80000+ employees. With these, Delhivery claims to possess processing of 15 Lakh parcels per day in over 18000+ pin codes in India across 2,500 towns and cities.

    

7.  Delhivery- Business & Revenue Model

Presently, Delhivery is recognized as the ‘Backbone of India’s in Supply Chain & Logistics start-ups in India.Though Delhivery is primarily based on a B2B & B2C business model, recently it has also ventured into the C2C model.The services offered by Delhivery could be divided into three primary subdivisions-

• Warehousing – Flexible warehousing across cities in India
• Transportation – Largest pan-India reach across 18000+ pin codes and 2500+ cities
• E-Commerce – Ready integration with Shopify, Woo Commerce, and Magento& Opencart.

Although the Delhivery platform specializes in transportation, the platform emphasizes a ‘plug-and-play model and provides a resolution for all its consumers who wish to deliver products to their respective consumers.

Speaking of revenues, Delhivery makes most of its revenues out of five business segments including – parcel delivery for businesses, consumer-to-consumer parcel delivery, freight services(truckload & partial truckload), warehousing, and cross-border logistics.Alternatively, its revenue comes from other smaller & secondary revenue segments like insurance, loading, unloading, cash-collection fees, etc.

A major share of Delhivery’s business revenues comes from some of the largest e-commerce players in the country including Amazon, Flipkart, Myntra, and more. However, with larger e-commerce players planning to build their own logistics arms in the future, Delhivery is shifting its focus towards the upcoming direct-to-consumer e-commerce companies that prefer to outsource logistics.

Like other courier businesses, Delhivery charges a pre-determined rate for parcels depending upon factors like weight, volume, and distance, but that doesn’t include any pick-up or platform subscription fee. With a capability of delivering up to 10 kg consignments with the same-day and next-day and long-distance orders within 2-5 days.

Delhivery also claims to have positioned well in the pricing upfront as well. According to Sahil Barua “Delhivery’s services are cheaper than leading courier companies like Blue Dart and FedEx but also expensive than some other smaller players”.

Despite their economic pricing, Delhivery has managed to achieve a record revenue of $479.06 Million (Rs 3700 crore in FY21) as compared to a turnover of Rs 2800 crore during FY2020 and Rs. 1694.9 crores in FY19.

8. Delhivery- Funding, Investors & Acquisitions

To date, Delhivery has raised a total sum of $1.69B over 15 rounds. In its pre-IPO round, it raised a sum of $303.73 mn (Rs 2347 cr) from 64 anchor investors that included names like Steadview, Tiger Global, and Bay Capital among others.As per another MCA filing, the Logistics giant has allotted 146,961 Compulsory Convertible Preference shares (CCPS) to Addition LLC at a value of Rs 37, 900 per share in the Series I funding round that took place on September 6, 2021. The MCA filings have revealed that Delhivery allotted 48 mn shares to the anchor investors at Rs 487 each.

According to Crunchbase, before this Delhivery raised a total sum of $5.6B from a UK-based VC firm Addition on September 24, 2021. Before this, Delhivery had raised a sum of &100M from courier giant FedX in a corporate round on Jul 15, 2021. Delhivery is also one of the earliest start-ups to enter the unicorn club in India on March 24, 2019, after collecting a sum of $413 million from a joint funding round led by SoftBank Vision Fund, Carlyle Group, and Fosun International and has managed to achieve an impressive valuation of $4.7B at present.

When it comes to acquisitions, Delhivery has raised three start-ups to date, whose highlights have been provided below-

According to Kapil Bharati (CTO, Delhivery) “These acquisitions will allow the Delhivery business an opportunity to be directly involved with the core drone technology, whose uses and regulations are currently evolving in the country.

9. Delhivery- IPO & ESOPs

Delhivery was gearing to bring its first issue to the public stock exchange of the country in the last two years. For which it filed its Draft Red Herring Prospectus (DRHP) in Oct 2021 and converted Delhivery as a public company (Delhivery Ltd) from Delhivery Pvt. Ltd. after receiving approval from its shareholders.

Now Delhivery is listed on BSE and NSE while joining the league of other businesses like TCI express, Bluedart, and Mahindra Logistics. Morgan Stanley, Citigroup, BofA Securities, Kotak Mahindra Capital, etc. were the book-running lead managers for the IPO.After the closure of the issue, the Delhivery shares were listed at Rs 493 per share on BSE against its listing price of Rs 487(1.2% increase) and Rs.Rs 495.2(1.7%) increase.

Though, the shares continued gaining the next day reaching Rs 537.25(an increase of 9%) BSE at the closing on the BSE and stood at Rs 536.25(10.1%) at closing on NSE. The Delhivery stocks were finally listed on May 24, 2022, on the BSE and NSE, and the very next, the shared noticed an increase by 4.73% to Rs 511 on NSE. The valuation of Delhivery, which stood at Rs 35,283 crore ($4.55 bn) before its IPO ramped up to Rs 37,022 crore ($4.77 bn) at the end of the listing day.

Delhivery became one of the earliest start-ups to list on the public stock exchange at a time when negative sentiment is dominating the public listing, but it also turned out to be one of the most rewarding experiences for its investors. Times Internet, which was one of the early investors to back the business and held a 4.92% stake in the business sold shares worth a sum of $21M in the Delhivery IPO,thus gaining 139X in returns.

Softbank, which joined Delhivery as an investor in 2019 held around 14,15,93,300 shares, out of which it sold 5% stakes in the IPO and earned 148% in return on investment.

Delhivery – ESOPs Offered & Distributed

As per Nov 2021 reports, Delhivery also announced the allotment of ESOPs worth a sum of Rs 43.6 crores to its 66 employees after filing its first IPO which was decided through an Extra General Meeting of its shareholders on Sept 29, 2021. The logistics giant declared the allotment of 12, 17,500 equity shares to more than 60 employees on exercising its stock options.

10. Delhivery- Partnerships & Competitors

Delhivery has entered partnerships and tie-ups with 11000 vendors & network partners who help it to ensure the smooth functioning of its key business functions. For instance, Delhivery announced its collaboration with Volvo, a luxury vehicles business in August 2020 with the purpose to add tractor-trailers into its express network. Sahil Barua explained, “This is one of the first major deployment of tractor-trailers in express trucking that is a significant step towards preparing Delhivery for the future while also expanding its network and building its leadership position in the market for coming years”.

FedX which is also an investor in the Delhivery business has also entered a strategic alliance that was signed in the month of July and completed on December 9, 2021. This partnership was entered to combine the widespread Pan-India network and technology solutions of Delhivery with the global network held by FedX.

As of March 31, 2022, Delhivery has also announced its partnership with Ajio, a Reliance retail platform with the primary intention to launch a technology-based Quality Check Return Product (QC-RVP) that will allow Delhivery’s last-mile agents to accomplish stringent quality checks at the customer’s doorstep before returning the shipment to Ajio.

Delhivery – Competitors

Delhivery thrives while facing stiff competition from logistics and supply chain businesses including-

• Ecom Express
• DotZot
• Future Supply Chain(FSC)
• BlackBuck
• Delex
• com
• Ekart Logistics
• Shadowfax

11.Delhivery- Future Plans

Delhivery continues to be extremely well-capitalized, with cash and investments of Rs. 2,512 crores and Rs. 3,846 crores of net IPO proceeds raised in May 2022. With enough resources, Delhivery aims to achieve growth through organic as well as inorganic methods.Delhivery has also planned to expand its business operations outside India through the export of technology built by Delhivery, after tasting the initial success of a pilot project in Sri Lanka.

In the coming years, Delhivery aims to aggressively invest in building its trucking infrastructure through an investment of around 300 crores in the next 24 months to expand its fleet size. Further, it aims to do more acquisitions to achieve more operational efficiency and increase its revenue base. Sandeep Barasia, the Chief Business Officer at Delhivery explains “Delhivery aims to offer integrated end-to-end services to its customers integrated with the help of its cutting-edge technology”.Kapil Bharati, the Chief Technology Officer & Co-founder also explains that “Delhivery has been using a technology stack built in-house by the company for its business operations. It also has built 80-odd applications which are being used by different stakeholders in-country.

Hence, what started as a simple hyperlocal express delivery service platform for offline stores delivering from boutiques and restaurant food restricted in the city of Gurgaon in its initial couple of months, has now arisen as a leading platform in e-commerce logistics. With the increasing demand for organized, effective & efficient logistics players in the Indian ecosystem, Delhivery has a promising future for better growth & expansion.