Softbank's new apple of the eye: A potential unicorn called Delhivery

Set up in 2011, when online retail was just taking off, today this firm is giving the likes of DHL, BlueDart and FedEx a run for their money

Delhivery, an e-commerce focused delivery start-up, is the latest to have caught the eye of the world’s biggest investor, SoftBank Group. 

Through its Vision Fund, the Japanese conglomerate is nearing a deal to acquire 38.8 per cent stake in the firm. The investment is reportedly to the tune of $400 million—and it may well make for eight-year old start-up's entry into the coveted Unicorn Club (a group of companies that are valued at over $1 billion). Softbank could not be reached for its comments for the story.

Two things stand out in Delhivery’s journey—identifying and catching a problem statement at the right time, and chasing the goal with grit and exceptional execution. 

In 2011, when online retail was just about discovering its wings, a group of four entrepreneurs led by Sahil Barua (only 26 at that time), saw an opportunity emerging. E-commerce as a sector was about to take off in India but the prevailing logistics infrastructure wasn’t simply tuned to the needs and demands of this new business.

In e-commerce, people want faster deliveries; the volumes are much higher, average item sizes are smaller, and return of goods sold, is frequent. For all these, a new set-up had to be concocted using the new technology. That was the guiding statement on which Barua started out, along with co-founders Mohit Tandon, Bhavesh Manglani and Suraj Saharan, while a fifth co-founder, Kapil Bharati, joined later.

Now 34, Barua was then a consultant at Bain & Company before launching Delhivery in 2011. Prior to that, he completed mechanical engineering from National Institute of Technology, Karnataka, and acquired a management degree from Indian Institute of Management, Bangalore. 

As the chief executive of the company, he is known, inside and outside his firm, for his execution prowess and clarity of vision. A big fan of comic books and rock music, he likes to travel, according to his past interviews. In eight years, Barua has led his firm to become one of the largest in the segment, which has also, in the process, offset the dominance of legacy logistics providers like DHL, BlueDart and FedEx. 

At present, Delhivery claims to deliver over 400,000 packages a day to 1,700 Indian towns and cities, and managing over 30 warehouses and fulfillment centres across India. The firm, which employs over 21,000 people, according to its website, had clocked Rs 1,070 crore in total sales in FY18. 

Because it mostly caters to e-commerce clients (a substantial portion of business comes from Flipkart and Amazon India), Delhivery has built out several sophisticated technology systems to supplement its core delivery business. It now offers inventory and order management, online payments systems and supply chain management technology, among other things, to its growing list of clients. 

Delhivery’s upward graph is also well captures in its funding. It has raised a funding round every year since its inception, except for 2016. Backed by the likes of Nexus Venture Partners, Tiger Global Management, Multiples Asset Management, Times Internet and private equity investors The Carlyle Group, Delhivery was valued at $700 million at its last reported funding round in May 2017.