Shadowfax Secures $100M in Series E led by TPG NewQuest

Shadowfax, a logistics startup, has raised $100 million in its Series E fundraising round headed by TPG NewQuest to allocate cash to improve its express delivery network, catering to the growing need for quick-commerce and expanding services to D2C brands.

The Series E round also saw participation from existing investors like Mirae Asset Venture Investments, Flipkart, International Finance Corporation (IFC), Nokia Growth Partners, Qualcomm, and Trifecta Capital, reflecting a strategic move by the startup to enhance its capabilities in response to the booming quick-commerce sector in India.

The $100 million injection will be instrumental in boosting Shadowfax’s express delivery network.

The company plans to reinforce its middle-mile network and extend its last-mile delivery services, with the ambitious goal of covering all 20,000 pin codes across India within the next 18 months. This move aligns with the growing demand for quick-commerce solutions, where third-party logistics providers play a pivotal role.

Diverse Funding Components

Notably, the Series E round for Shadowfax comprises primary capital, secondary share sales, and a venture debt component. This diverse funding structure allowed early investors, such as Eight Roads Ventures, the first institutional investor in 2015, to exit partially, underscoring the company’s growth trajectory.

Shadowfax has reported profitability for three consecutive quarters in the current financial year, from April to December 2023. With a focus on sustainable growth, the company aims to achieve its first full financial year of positive EBITDA in FY24, considering ESOP costs.

“Our ability to capture a greater share of the market, even in a tough economic climate, is a testament to the core strength of our business. Now having another marquee investor on the board only adds to our confidence in what we’re building,” Abhishek Bansal, CEO of Shadowfax said.

Strategic Utilization of Funds

The funds will strengthen Shadowfax’s middle-mile and last-mile delivery services and develop services for direct-to-consumer (D2C) brands. Additionally, the company aims to enhance its express delivery network, catering to the market’s evolving needs.

Shadowfax currently boasts a distribution network spanning over 2,500 cities and covering 15,000+ pin codes, delivering an impressive 2 million packages daily.

The crowdsourcing network comprises 125,000 monthly active delivery partners and 3.5 million registered users. In December, Shadowfax introduced the Flash app, providing on-demand delivery services within cities.

“As the market evolves, we are excited for the company’s continued success as the preferred partner of choice for e-commerce and express logistics on the back of its industry-leading tech innovation and operational excellence,” said Shweta Bhatia, Partner and Head of Technology, Consumer & Financial Services Investments India, Eight Roads Ventures.

Financial Performance

According to startup data, Shadowfax recorded significant revenue growth, reaching INR 1,415.40 crore in FY23, compared to INR 990 crore in FY22. The company managed to control losses, reducing them from Rs 176 crore in the previous fiscal year to INR 141 crore in FY23.

Shadowfax’s successful Series E funding round, backed by influential investors, positions the logistics startup for continued growth in the dynamic Indian market.

The strategic allocation of funds to expand delivery networks, cater to quick-commerce demands, and develop services for D2C brands underscores the company’s commitment to staying at the forefront of the logistics industry.

Stay ahead of the curve and follow IndiaTechDesk on Facebook, Twitter and Linkedin for in-depth news of market trends, funding updates, and regulatory changes affecting startups in India.