Will XpressBees write a similar success story for Alibaba as Paytm did??

 Will XpressBees write a similar success story for Alibaba as Paytm did??

Last week, Xpressbees has raised $110mn to automate its hubs and sort centers, technology and to expand the delivery footprint to cover the entire country

The logistics industry was not as amusing as they are today when xpressbees started. In 2014 India ranked 54 in the World Bank’s Logistics Performance Index (LPI), in terms of overall logistics performance. In 2017, the logistics Sector was granted infrastructure status. So we can imagine what the condition was at that time. However, stats have changed rapidly as the sector has been on a continuous growth journey over the past few years with a mix of ups and downs and emerges as the lifeline of the Indian economy in a true sense. India’s logistics sector, currently valued at $160 billion, is expected to grow at a CAGR of 10% to $215 billion by 2022.

That’s the vision XpressBees’s founders had sawed in 2015

Backed by Alibaba and incubated by the founding team of FirstCry.com and IIM alumni, AmitavaSaha and SupamMaheshwari. Firstcry had started logistics business in 2012 when it decided to start to express deliveries of its products and then forayed into third-party logistics (3PL) at the beginning of 2015. The company was spun off as BusyBees (XpressBees) in September 2015 and has ramped up orders significantly since then.

In 2016, the company had started operating the largest same-day delivery (SDD) and next day delivery (NDD) network in the country, covering around 100 cities along with offering specialized services like ‘try and buy’ in the fashion category and clocked 1 lakh shipment daily when the market was just $20bn from 50k per day in 2015. They had witnessed a 150% growth rate in 2017 in shipment handling while being 4X more capital efficient compared to its competitors.

But why logistics after running a successful e-commerce business??

While contemplating their next venture, as the serial entrepreneurs already running a successful venture, the duo realized that babies could be a good sector since they frequently traveled abroad and brought some gifts for their children which are not available in India. FirstCry was launched to offer variety in the baby products segment. After running the startup successfully they realized the issue with the delivery of the products despite working with the best logistics players in the industry at that point in time. So they decided to start their own delivery service- XpressBees in 2012. In 2015, XpressBessstarted working with small firms and other e-commerce companies after making a reputation in delivery. So they had realized that there is a real business opportunity, especially as a technology company, and made XpressBees a separate entity since then.

Xpressbees aims to fulfill the comprehensive supply-demand needs of India’s online industry through best in class solutions and domain expertise. It provides flexible and comprehensive Last-Mile Delivery, Reverse Logistics, Payment Collection, Drop Shipping, Vendor Management, Cross Border Services, Fulfillment Services, and tailored Software Solutions.

Pricing of the company’s solutions is similar to any delivery company, with weight and distance being key parameters for delivery. They make a profit on every unit it delivers and has likely always been unit economic profitable.


Delhivery success had boosted investor’s interest in the sector in 2012

Investors did not want to lose the opportunity to invest in a company working in such an amusing space and hence Xpressbees has raised a total of $277.6M in funding over 7 rounds. Their latest funding was raised on Nov 10, 2020, from a Series E round. New Enterprise Associates, Valiant Capital Partners, Alibaba, Alibaba Group, IDG Ventures India, SAIF Partners, Gaja Capital, Vertex Ventures, Norwest Venture Partners, Investcorp are some of their investors.

Are the funds utilizing in the right way?

In FY19, XpressBees reported revenue growth of 100% to Rs 541 crore, while its losses more than doubled to Rs 673.17 crore due to the increase in the costs of expansion, creating infrastructure and capacity, and other overheads

XpressBees is now one of the largest e-commerce-focused logistics company, having a presence in about 2,000 cities, handling over 2.4mn daily shipments across the country, and have currently over 1,000 clients including Snapdeal, fashion portal Myntra, Paytm Mall, e-pharmacy startup Netmeds, social commerce startups Meesho and Shop101, and eyewear retailer Lenskart, among others. It competes with Tiger Global-backed Delhivery and Warburg Pincus-backed Ecom Express.

The latest round valued the startup at more than $350M.

Pretty good actually!!

What lies ahead in the future for them?

Pandemic has brought into light the various loopholes existing in the logistics industry that exposed its vulnerability and brought the operations to a halt. However, reforms being introduced by the Indian government to make it more resilient, innovative, and sustainable in the future as in the recent stimulus package of ₹1.5-lakh-crore announced by the government to strengthen logistics is a positive step in this direction also a greater focus on digitalization and technology adoption across the logistics value chain can create enormous breakthroughs.


Takes from The VC Stories

Currently, the startup is handling 2.4mn daily shipments up from 600k last year, delivering 4x multiple. In FY19, the revenue had grown by2x while cost with the same as well. In the same year, E-com express has given 2x growth, Delhivery has 1.5x, and eKart has 1.77x in revenue with an average 2.2x in cost. Comparing with the industry revenue multiple of 1.75x and cost of 2.2x, XpressBees was doing better than its competitors.

Takin the current multiple of 4x, one would expect that FY20 revenue will be $292mn ($73mn*4). So at the current valuation of $350mn, XpressBees is delivering 1.2x multiple (approx.). Market size will also grow at 10% CAGR hence, 1.2x seems fair for the company.

To write the same success story for Alibaba, as Paytm did, in the next 3 years, the company needs to grow at 1.5x multiple. Considering the current multiple it is not entirely impossible because the market size will be $215bn by 2022 (will continue to grow at 10%) and $292mn revenue at a current market size is just a drop in the ocean i.e., .2% (roughly).

With the current investment, XpressBees can do a lot better than that as it plans to deploy the fresh capital to further automate its hubs and sorting centers and expand its delivery footprint to cover the entire country. Also due to the COVID-19, there was a 2-months nationwide lockdown and after that, at least a 2-months slowdown in the industry due to lack of confidence has hampered the services but still, the company has outperformed its competitors and placed itself among the best-performing logistics startup (thanks to their marketing strategy and e-commerce partners).

If the company can maintain the same market share (.2%) and considering the above factors, delivering a 1.5x multiple will not be an issue for them. So the new age technology startup, Xpressbees will continue to play a pivotal role in the growth of the e-commerce sector in India.

In the next 3 years, another successful exit awaits Alibaba.



We manifest the entrepreneurial and startup ecosystem for enthusiastic entrepreneurs by helping them build their entrepreneurial skills and encouraging them in job creation rather than finding ones. These episodes aim to provide much-needed guidance & motivation among the youth and bridge the knowledge gap.

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