Logistics firm Xpressbees raises $300 million in funding from PE funds Blackstone, TPG, and ChrysCapital at $1.1 billion valuation

ETtech

Xpressbees was incubated and started by Firstcry, a baby products etailer almost a decade ago but was spun off as an independent entity in 2015.
Existing investors, Investcorp and Norwest Venture Partners, also participated in the round.

ET was the
first to report the proposed deal on January 17.

“A large part of the new financing round is secondary where some of our existing investors have partially cashed out,” Amitava Saha, CEO, Xpressbees told ET. Operated by BusyBees Logistics Solutions, its major investors include Elevation Capital (formerly SAIF Partners), NEA, Vertex Ventures and Valiant Capital.

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The company aims to become a full-fledged logistics service provider by adding more muscle to its business-to-business (B2B), warehousing and cross-border verticals. “We will use the capital for financing technological advancement, increasing automation and to grow geographical presence. We will also look at inorganic growth opportunities,” Saha said.

With this round, the total amount of funds raised by Xpressbees has exceeded $500 million. In November 2020, private equity funds Investcorp, Norwest Venture Partners and Gaja Capital
had together ploughed about Rs 800 crore ($110 million at the then exchange rate) to acquire about a 31% stake in Xpressbees. In 2017, Alibaba invested $35 million in the firm.

Business is profitable, says CEO

The business is profitable and has grown at a 70% compounded annual growth rate or CAGR in the last 12 months, Saha said. “We are currently at Rs 1,800 crore in revenues and expect it to grow 50% year on year for the next two to three years.”

Expressbees was launched by Saha and Firstcry founder Supam Maheshwari. It offers logistics solutions to ecommerce players. “We are currently earning almost 90% of the revenues from ecommerce whereas the remaining 10% comes from our B2B, warehousing and overseas business. We expect the mix to change 65:35 over the next two to three years,” he added.

The logistics firm competes with well-funded logistics service providers such as Tiger Global-backed Delhivery, Warburg Pincus-backed Ecom Express, InfoEdge-backed Shiprocket, Guild Capital-backed Pickkr and Goldman Sachs-backed BlackBuck.

For Blackstone, which is now looking to invest out of its $4.5 billion global growth fund, this is the first investment in India. “Xpressbees is playing an important role in India’s booming e-commerce sector, which is still at an early stage and has a long runway of development. We look forward to leveraging Blackstone’s deep expertise and global network in logistics and ecommerce to accelerate Xpressbees’s growth,” said Mukesh Mehta, senior MD at Blackstone Private Equity, based in India.

Blackstone will look to back more growth-hungry new-age companies in India across sectors such as Software-as-a-service (SaaS), B2C, ecommerce, vertical ecommerce, fintech, edtech, among others, Mehta said. The firm is in the process of raising a larger fund at the global level to back growth companies. It takes minority positions in such companies, unlike its Asia fund which looks at taking large stakes and buyouts in sunrise sectors.

Xpressbees is currently present across 3,000 cities, serving over 20,000 pin codes, and delivers over 1.5 million packages per day. Xpressbees now has over 100 hubs across India, 10 lakh sq. ft plus warehouse capacity, and operates across 52 airports in the country.

Avendus Capital acted as the exclusive financial advisor to Xpressbees on this transaction.