Shadowfax raises $100 million Series E round led by TPG New Quest

Mumbai: New-age logistics services provider Shadowfax on Tuesday said it has raised $100 million in a mix of primary and secondary funding towards its Series E round, led by TPG NewQuest.

Though valuation details were not disclosed, people with knowledge of the development said the deal values the nine-year-old company at $500-550 million.

The round also saw participation from existing investors, including Mirae Asset Venture Investments (India), Flipkart, International Finance Corporation, Nokia Growth Partners, Qualcomm, and Trifecta Capital, Shadowfax said in a release.

Mint was the first to report NewQuest’s interest in the company.

The $100 million raised includes about $50 million in primary capital, $18 million in venture debt, and the balance in secondary investments.

The company has so far raised nearly $120 million from investors such as Eight Roads Ventures, US investment firm NGP Capital, Qualcomm Ventures and Mirae Asset Naver Fund, and Flipkart.

Early backer Eight Roads Ventures that has invested in the company since its Series A in 2015 made a partial exit through this round, ShadowFax said.

With an annualised revenue run rate of ₹2,400 crore for FY24, the company has been growing profitably in the previous four quarters, said Abhishek Bansal, cofounder and CEO, Shadowfax, in an interview with Mint. It anticipates closing its first Ebitda positive year by 31 March 2024.

“Given that we are already profitable, we will be actively looking for more inorganic opportunities,” Bansal said, adding that the company plans to list on Indian bourses in the next 24 months.

Over the next 18 months, Shadowfax plans to utilize the new funds to broaden its middle-mile network and extend last-mile delivery across all 20,000 Indian pin codes.

“Part of the raised funds will be used to develop services for direct-to-consumer (D2C) brands and further enhance Shadowfax’s express delivery network,” it said.

“The way quick commerce is growing in the country, speed has become paramount for players in the logistics space. We will be building the middle-mile delivery and strengthen our tech offering to ensure we become a full fledged courier in the 3PL space,” Bansal said.

Founded in 2015 by Bansal, Vaibhav Khandelwal, Gaurav Jaithliya, and Praharsh Chandra, the company caters to online-first brands with services ranging from 30-minute deliveries for quick commerce, pharmacy and food delivery companies to broader e-commerce logistics.

“Shadowfax is revolutionizing the e-commerce logistics sector in India. We have been impressed with the tech stack they have built. This helps with the delivery of superior service metrics and allows them to quickly adapt their services to client’s changing needs at the lowest price,” said Amit Gupta, partner and head of India and Southeast Asia, TPG NewQuest.

With a network of 150,000 monthly active delivery partners and over 2 million daily orders across more than 2,100 cities, Shadowfax serves over 100,000 merchants. Its client roster includes over 300 D2C brands like Ajio, Nykaa, and Flipkart.

For the financial year ended 31 March 2023, the company clocked ₹1,415.40 crore in revenues as against ₹990 crore in FY22. Losses stood at ₹141 crore in FY23. According to the release, the company is on track to achieve its first full financial year of positive Ebitda in FY24, after accounting for ESOP costs.

The logistics sector in India is essential for over 22 million livelihoods and accounts for 14.4% of the GDP, as per India Brand Equity Foundation. The sector is expected to grow by more than 8% CAGR over the next five years, a report by Mordor Intelligence said.