logistics

Shadowfax Nears ₹350-400 Crore Funding Round, Valuation Set to Double Before IPO

• ByStartupStory     |    October 21, 2024

Flipkart-backed hyperlocal logistics startup Shadowfax is reportedly in the final stages of securing a funding round worth ₹350-400 crore ($45-50 million), which could double its valuation to ₹5,500-6,000 crore ($700 million). This upcoming round is anticipated to be the last private funding before the company moves towards its initial public offering (IPO).

According to multiple sources familiar with the matter, the funding will involve domestic family offices, mutual funds, and high-net-worth individuals (HNIs), who typically invest prior to a public issue. Wealth managers such as Nuvama and InCred, known for pooling investment deals for private clients, have also engaged with Shadowfax regarding this round.

Shadowfax, which specializes in quick commerce and same-day e-commerce deliveries, is looking to finalize its investors in the coming weeks. Previously, the company raised a substantial $100 million earlier this year, led by growth investor TPG NewQuest, which valued the company at $350 million.

“They were looking to raise around $30-35 million in this round but given the interest in the firm because of its IPO plans and the quick commerce exposure, there is adequate demand for the round to be expanded,” a source revealed.

Another insider elaborated on the IPO timeline: “The idea is to set the valuation before filing for the IPO. That (draft IPO papers) should also happen this financial year.”

This funding round may also see some existing investors part-sell their stakes in a secondary share sale. “Both new and existing investors will participate in the round,” noted another source.

Founded in 2015 by IIT Delhi alumni Abhishek Bansal, Vaibhav Khandelwal, Praharsh Chandra, and Gaurav Jaithliya, Shadowfax has evolved from an on-demand logistics provider for food delivery platforms to servicing e-commerce giants like Meesho.

Bansal declined to comment on the company’s fundraising plans, but the momentum in the quick commerce sector is evident. Shadowfax is experiencing significant growth, delivering 2-2.5 million packages daily and maintaining a network of 1.6 million monthly active delivery partners.

One insider emphasized the strategic direction: “Part of the primary capital being raised will be deployed towards Shadowfax’s expansion of its quick commerce operations. Shadowfax wants to strengthen its balance sheet before the IPO…but it is also planning to rapidly invest in quick commerce, dark store operations, and same-day delivery.”

The overall quick commerce sector is seeing increased interest from investors, further motivating Shadowfax’s decision to expand its footprint. Currently, quick commerce and hyperlocal deliveries contribute to approximately 25% of the company’s business, with projections suggesting this could grow to 35-40% in the coming year.

In FY24, Shadowfax recorded ₹1,900 crore in operating revenue—a 35% increase from the previous fiscal year—and anticipates reaching around ₹2,500 crore in FY25. The majority of this revenue is derived from same-day delivery services, showcasing the company’s pivotal role in the evolving logistics landscape.

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