Khazanah Nasional, the national wealth fund of Malaysia, purchased a 3% interest in the logistics company Xpressbees, which specializes in e-commerce, for $40 million through a secondary share sale, according to people familiar with the transaction. Xpressbees arranged the capital round at a premium of 25–35%, valuing it at around $1.3–1.4 billion, according to those with knowledge of the situation.

According to these persons, Elevation Capital, formerly Saif Partners, has sold a portion of its shares to Khazanah.

After this round, the India-focused venture capital firm will control just around 2% of the business, compared to the 13% it previously had in Xpressbees.

The venture capital fund received shares in Xpressbees in 2015 after the logistics company was separated from its parent, e-commerce giant FirstCry. The fund was an early investment in Paytm, Swiggy, and Meesho. The investment firm invested an additional $4 million in the logistics business.

Elevation completed their withdrawal in 2021 by selling a 10% investment in FirstCry, which was created twelve years earlier by Supam Maheshwari, Amitava Saha, Prashant Jadhav, and Sanket Hattimattur.

This is an Elevation from Xpressbees’ second significant liquidity event in the past year. By selling a portion of their ownership to Avendus Future Leaders Fund in August of last year, they made around $25 million, according to a source with knowledge of the situation. On condition of anonymity, a source with knowledge of the deal’s specifics said that Elevation had extracted around $120 million from its investment in Xpressbees over the previous 12 to 18 months.

When Pune-based logistics company Xpressbees received $300 million, of which $100 million was in primary financing and the remaining $105 million came from a secondary share sale, it was valued at $1.1 billion.

Large private equity funds, including Blackstone, TPG, and others, have contributed to the fundraising. According to a source previously mentioned in the article, Elevation recorded an outflow of almost $55 million during this sale.

Focusing on second-tier transactions

The most recent deal at Xpressbees is comparable to recent high-profile secondary deals being carried out by major internet companies, such as the agreement between eyewear retailer Lenskart and the Abu Dhabi Investment Authority (ADIA) and the ongoing negotiations between SoftBank and sovereign funds at mother-and-baby products retailer FirstCry.

In January, ET also revealed that two of Flipkart’s original investors, venture capital firm Accel Partners and New York-based Tiger Global, are in discussions to sell their remaining shares to Walmart Inc., the parent company of Flipkart.

Shares are exchanged between current and new investors in a secondary transaction, so money does not enter the company.

Financials of Xpressbees

The business that competes with publicly traded Delhivery has been aggressively growing and stealing market share from rivals even as new investors are joining Xpressbees.

Sources claim that Xpressbees, which had operational revenue of over Rs 1,900 crore in FY22, increased its top line by 30–40% in the just-ended fiscal year ending March 31, 2023.

From Rs 63 crore in FY21, the company’s losses dropped to about Rs 27 crore in FY22. The forecasts for FY23 are based on unaudited data.

One of the individuals informed on the statistics stated, “They grew by 40% until the third quarter of FY23.” Around 1.4–1.5 million shipments per day are anticipated from them.

Xpressbees collaborates with a number of direct-to-consumer (D2C) businesses as well as e-commerce sites, including Flipkart, Amazon e-commerce, Meesho, and Tata Cliq.