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Delhivery’s path to a potential $ 1 billion initial public offering

Ten years ago, Sahil Barua, Mohit Tandon and Suraj Saharan quit their lucrative jobs at Bain & Co. in order to realize their dream of setting up a third-party logistics company. They also managed to convince Bhavesh Manglani, who worked at Reliance Industries, and Kapil Bharati, who had founded two companies, to join them.

On April 5, 2011, her dream took off with the establishment of SSN Logistics, the parent company of Delhivery, with an authorized share capital of 1 lakh.

It wasn’t a smooth trip. The founders had to pool funds out of their own pockets in order to keep the company running for the first year, after which the angel investor Abhishek Goyal from Traxcn 50-60 lakh, which kept us going for about 12 months, “recalled Barua, CEO and MD of Delhivery, in a 2015 interview with VCCircle.

After a string of fundings from marquee investors like Carlyle, SoftBank and FedEx, the founders are now sitting on a godsend, with Delhivery poised to kick off its IPO at up to $ 7,460 billion at a valuation of $ 5.5 billion.

Barua alone has a stake in value 1,296 crore, according to the draft Red Hering Prospectus (DRHP) filed with the Securities and Exchange Board of India last week. Together the four founders (Barua, Saharan, Tandon and Bharati) own a total share worth $ 3.176.7 billion. Manglani resigned in December 2020.

Not all founders intend to sell their shares in the upcoming IPO, which is a new edition of 5,000 crore and an Selling Offer (OFS) of up to 2,460 crore from existing promoters and shareholders.

Barua will not take part in the OFS round. On the other hand, Tandon, who has a 1.88% stake in the company, has offered shares worth. for sale 40 crore; and Saharan, which holds 1.24%, has proposed to sell the share value 6 million.

Bharati, the company’s chief technology officer, owns 1.11% and has offered shares valued at. for sale 14 crore during the public float.

As with many startups, the journey has not been easy for Delhivery. In the interview quoted above, Barua recalled that one of the biggest challenges was convincing investors that a third party could be created and that there was room for an e-commerce enablement business. For eight months in business, apart from the five founders, Delhivery had only one person in the call center, a tech expert and all 30 “field people,” said Barua, highlighting the difficulty of attracting people.

According to the DRHP, Delhivery had 12,665 permanent employees and 27,313 contract workers in June. It also hires temporary workers for last mile delivery services; in June there were 26,370 deliverers on the last mile. In addition, it has 21 automated sorting centers, 71 fulfillment centers, 2,235 self-managed centers and over 1,100 constellation partner centers, which are among the largest logistics companies in India.

Automation played a key role in differentiating Delhivery from traditional courier services, according to Barua.

“Technology is at the core of what we do … from order management systems to warehousing and stock location, all of this is supported by our in-house technology,” he said.

Delivery’s growth was also driven by massive funding from venture capital and private equity investors. The Gurugram-based company became a unicorn in 2019 after raising $ 395 million in a Series F round led by SoftBank, valued at around $ 1.5 billion.

Delhivery was also very active in inorganic growth; the largest acquisition this year was the purchase of Spoton Logistics Pvt. GmbH.

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