Mahindra Logistics acquires last-mile delivery firm ZipZap for Rs 72 crore

Mahindra will acquire 60% in the Hyderabad-based firm through primary and secondary purchases in two phases

Mahindra Logistics, a third-party logistic solutions provider said it has acquired a majority stake in ZipZap Logistics, a last-mile logistics service provider that operates under its brand ‘Whizzard.’ Mahindra will acquire 60 per cent in the Hyderabad-based firm for Rs 71.73 crore through primary and secondary purchases in two phases. It would also buy out the reminder of the stake at a later stage and make it a fully-owned subsidiary. MLL will complete the acquisition before November 30 2023.

The acquisition will help MLL make deeper inroads into smaller towns and cities where Whizzard has a strong presence.  It will help the company tap into the multiple formats for last-mile delivery like quick commerce that are coming up in a big way, Rampraveen Swaminathan, MD and CEO Mahindra Logistics.

“The last mile is very important for us from a growth perspective. Overall, from the industry perspective, Last-mile accounts for only 15 per cent of the kilometres but contributes 40 per cent of the cost for a company. Whizzard is an important capability play. It would help us to augment our reach,” he told Business Standard.

With changing customer requirements and demand for quick delivery gaining pace and increased digitisation, the last mile delivery has been growing at a very rapid pace. While much of the growth has come from e-commerce, green shoots are also seen outside. Several new formats of last mile delivery solutions are also evolving.  We are acquiring 60 per cent of the company through primary and secondary purchases. It would be acquired in two stages for a consideration of Rs 71.73 crore. We will consider buying the remaining equity as well to make it a fully owned subsidiary.

“Traditionally, MLL has been very strong in the metro areas – tier one cities and towns. With this, we will be able to reach the last mile. From the tech perspective, Whizzard has developed capabilities that would allow us to serve the market better,” explained Ankur Singhai, head of e-commerce vertical, MLL. The number of MLL’s distribution and delivery centres will go up to over 200 with the deal.  Whizzard on the other hand will benefit from significant investments MLL has made in the sustainable last mile delivery by deploying EV for last miles, he added.

The recent acquisition is in line with the Mahindra Group strategy to acquire companies for capabilities and not necessarily for scale, said Swaminathan, citing an instance of the freight forwarding company which was a Rs 100 crore company when it was acquired but it has now grown four times.

Whizzard will be a service line for MLL, will retain its brand and continue to be run by the existing promoters and benefit from the Mahindra ecosystem.

Hyderabad based Whizzard operates an intra-city distribution network for digital commerce and last mile delivery. Whizzard currently enables seamless handling of 60 million packages per year, across diverse segments. Led by the founding team of Ankit Madhania and Arun Rao, Whizzard has grown 10x in the last three years and serves customers with its full stack digital capabilities and micro-distribution centres catering to 3,000-plus pin codes.