Ahead of the IPO, homegrown logistics startup Delhivery is busy beefing up its business. The company on Tuesday announced the acquisition of its rival company Spoton for $200 million. This will give an exit as well as hefty returns to the Spoton investors - Samara capital and Xponential Fund Partners.

What does Spoton bring to the table for Delhivery?

The acquisition will enhance Delhivery's B2B express business capabilities. It will also provide synergistic benefits for the customers of the two delivery providers – Delhivery, as well as Spoton, with the B2B and B2C combination and, therefore, enhance the end-to-end supply chain capabilities.

Recently, Delhivery had collaborated with FedEx Express, which infused $100 million into the company and is also taking all these steps now to make the company more attractive for higher valuation in the IPO, which is underway.

The expected valuation of Delhivery by way of the IPO could be nearly $4 billion. The company is backed by marquee investors like Carlyle, SoftBank, and Tiger Global.

Delhivery had raised $275 million in May in a primary funding round led by Fidelity Management and Research Company. The funding took Delhivery's valuation to over $3 billion.

"This development is consistent with our objective of being growth-oriented and building scale in each of our business lines. Over 10 years, Delhivery has established a leading position in B2C logistics and now by combining our part truckload business with Spoton's we will be on the path to the same position in B2B express as well," Delhivery CEO Sahil Barua said.

Spoton Logistics managing director Abhik Mitra said the focus will continue to be on improving clients' businesses through investments in people, technology, network and infrastructure. "Our teams and our business partners will have an opportunity to be part of a much larger organisation with significant opportunities for growth," he said.

-With PTI inputs

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First Published:Aug 25, 2021 3:52 PM IST