Logistics firm Xpressbees has nabbed $40 million after Malaysian sovereign wealth fund, Khazanah Nasional Berhad acquired a stake in the firm in a secondary share sale. In an official release, Xpressbees said that this investment was made through a secondary share sale by Elevation Capital, an early investor in the eight-year-old third-party logistics provider.
As part of the sale, Elevation Capital, formerly known as Saif Partners, sold a part of its stake to Khazanah Nasional, the sovereign wealth fund of Malaysia. With the share sake, the deal puts the valuation of Xpressbees to around $1.2 billion, an increase from the $1.1 billion it recorded as a valuation in February 2022 after raising $300 million in primary capital. According to media reports, which cite sources such as two people with knowledge of the deal, Elevation Capital sold a 4% stake in the company to Khazanah.
“There is a huge opportunity for tech-led disruption in logistics. We have established a leading brand but are still early in our growth story. We continue on our path to becoming a dominant end-to-end logistics player and look to leverage any strategic opportunities. Khazanah’s disciplined long-term investment approach makes the Malaysian sovereign wealth fund a perfect partner for us in this journey,” Amitava Saha, founder and CEO of Xpressbees, spoke on the matter.
“We believe Xpressbees is well-poised to build one of the largest tech-led businesses as they ride on the massive ecommerce market opportunity,” added Karan Sharma, MD & Co-Head, Digital and Technology Investment Banking, Avendus Capital.
The Indian logistics sector has been growing rapidly, driven by the increasing popularity of e-commerce and rising consumer demand. According to industry experts, the sector is expected to reach a market size of $435.43 billion this year. Foreign investors have been taking note of this growth potential and have been investing heavily in Indian logistics companies. The current development is simply the latest in a long line – in 2020, e-commerce giant Amazon acquired a 49% stake in Future Coupons, the promoter entity of Future Retail, and has also invested in other logistics firms such as Appario Retail and More Retail.
This development marks the second secondary round for XpressBees in the past 12 months. In August 2022, Elevation Capital offloaded a part of its stake – one that was worth $25 million – in the logistics firm to Avendus Future Leaders Fund via a secondary share sale. At that time, it sold the shares for ₹195 crores. Xpressbees, founded in 2015 by Saha and Supam Maheshwari, provides end-to-end e-commerce logistics solutions, including last-mile delivery, reverse logistics, B2B/B2C express delivery service, and cross-border logistics services. Its clients include e-commerce players including Snapdeal, Myntra, Meesho, Netmeds, and Bigbasket.
Today, the firm boasts of having the likes of Blackstone Growth, TPG Growth, ChrysCapital, Alibaba Group, Elevation Capital, Investcorp, and others among its backers. In its official statement, Xpressbees noted that its losses narrowed the fiscal year 2022 (FY22), the company reduced its losses ₹63 crores in FY21 to around ₹27 crores ($3.6 million) in FY22, while its operating revenue amounted to over ₹1,900 crores. It claims to have over 100 hubs across the country, more than 3 million sq. ft. of warehouse capacity, as well as operating across 52 airports in India. Having a presence across 5,000 cities, it serves over 20,000 pin codes and delivers over 2 million packages daily.