Shadowfax scores $60 Mn Series D round led by Flipkart

E-commerce and hyperlocal focused B2B logistics enabler Shadowfax has raised $60 million in a Series D round led by Flipkart. The e-commerce marketplace was in talks with the Bengaluru-based logistics firm for over four months.

Existing investors, including Eight Roads Ventures, Nokia Growth Partners, Qualcomm Ventures, Mirae Asset Naver Fund and World Bank-backed IFC, also participated in the round.

For Flipkart, this will be the third investment in logistics space. The other two are online freight service provider Blackbuck and parcel-delivery locker service QikPod. The investment is aimed to spruce up logistics capability for the Walmart-controlled firm.

With this round, Shadowfax has raised a little over $100 million in funding. In August 2018, it had raised $22 million led by NGP Capital. Qualcomm Ventures, Mirae Asset and existing investor Eight Roads Ventures had also participated in that round.

While the company didn’t disclose valuation in the fresh financing round, Entrackr's sources said that it’s valued in the range of $250 million. Shadowfax claims to process 10 million orders a month across e-commerce and hyperlocal delivery.

According to a press statement issued by Flipkart, the company has picked up a minority strategic stake in Shadowfax. Sources indicate that the Kalyan Krishnamurthy-led firm could also use the logistics firm for delivering grocery. Of late, Flipkart has been eyeing a significant pie in the grocery and FMCG segments.

Through this investment, Flipkart will be able to further unlock opportunities in grocery and fresh produce, powered by Kirana stores and leveraging Shadowfax’s strong technology and fulfilment capabilities.

Unlike Amazon and any other horizontal e-commerce platforms, Flipkart has built its in-house logistics and supply chain company - eKart. According to its holding entity Instakart’s annual financial statements, eKart has recorded a 78% hike in revenue to Rs 4,422.2 crore in FY 19 from Rs 2,488.7 crore in FY18.

A significant jump in total income had helped eKart offset losses which dropped by 41% to Rs 293.6 crore in FY19, from Rs 500.1 crore in FY18.

Picking up a minority stake in Shadowfax will certainly help Flipkart ramp up its logistics piece. It will likely power the hyperlocal business for the Singapore-registered company.

Claimed to be the largest crowdsourced delivery platform in India, Shadowfax also entered the Chinese market with two-way logistics services between India and China.