Walmart’s Flipkart has just invested around $60 million in the logistics startup, Shadowfax, in a new funding round. With this funding, Flipkart is aiming to build its logistics network.
Flipkart has led the financing round for the Bangalore-based startup, according to the CEO and co-founder of the company, Abhishek Bansal. Moreover, other investors in the round include Nokia Growth Partners, Qualcomm Ventures, World Bank-backed IFC, Mirae Asset-Naver Fund, and Eight Roads Ventures. This new funding has increased the total amount raised by the company to $100 million.
This new funding round has increased the valuation of the company to $250 million. According to two sources, Flipkart invested around $30 million in the funding round. However, the startup has declined to comment on its valuation and the individual contribution of investors.
Shadowfax is a business-to-business logistics network. The company is operational in over 300 cities in India. The startup works alongside the neighborhood stores to use their real estate to store inventory. Moreover, many freelancers work alongside the company for delivery purposes.
The CEO of Shadowfax, Bansal, said, “Any individual with a bicycle or truck can work with us.” The startup also has its facilities and handles millions of shipments per month. He added, “We work efficiently and deal with large enterprises.”
The logistics startup handles items in different categories, like grocery, e-commerce, fashion, and hot food. “Shadowfax has quite a reliable logistics network. Moreover, our delivery stores in a few kilometer radii of our customers, so we deliver quickly. The staff of the grocery stores also handles the delivery, and they have to work for some time with us. This way, they can earn extra money.” You might be surprised to know that the platform has over 100,000 delivery partners.
Flipkart is one of Shadowfax’s clients. A Flipkart’s spokesperson said that they would work closely with the startup. The CEO, Kaylan Krishnamurthy, mentioned that Shadowfax would facilitate the company to “lessen the delivery time and provide improved customer care.” He also added, “We are taking leverage from delivery startups, like Shadowfax and others, to incorporate inroads in a hyperlocal consumer market.” Currently, Flipkart has a stake in many logistics firms, like parcel-delivery locker service QikPod and the freight service Blackbuck. Across the globe, e-commerce firms are trying to get better control of logistics. Last month, the Chinese giant Alibaba said that it was going to invest $3.3 billion in Cainiao, which is a logistics firm. Moreover, it has also invested in several other logistics companies, like YTO, ZTYo, Best Logistics, and STO Express. Alibaba also announced last year that it would help uplift Africa through various initiatives.
Many startups are giving importance to the logistics space in India because they want to address the inefficiencies of the system. Two months ago, Prosus Ventures led a $40 million round in the popular logistics startup, Elastic Run.
Just like Shadowfax, Elastic Run its also targeting mom and pop stores in different towns, cities, and villages. Moreover, they have many e-commerce giants as their customers.
Bansal said that they would use the funding to expand its network to smaller towns and cities. He also said that they would use the funding to expand the staff and tech infrastructure. They will also look to increase the clients to handle over 100 million deliveries per month.
Shadowfax’s network is continuously increasing, and the company is looking for new ways to expand. Bansal said that they are also thinking of expanding to other categories, like perishables and meat. He also stresses that their delivery time is quite fast. He said, “These days when customers buy a product from an online store, the delivery takes two days. However, we will deliver it to you in an hour.” This expansion will also be beneficial for Flipkart. The reason is that smart-phones sell like hot cakes in India, and Flipkart is even thinking about getting into the retail food business.
