Snapdeal Ties-Up with E-Commerce Logistics Firm GoJavas; Possible Acquisition in Pipeline?

Image Source: DealCurry

Image Source: DealCurry

To strengthen its delivery network in the country, online marketplace Snapdeal has entered into a strategic partnership with GoJavas. But some media reports have speculated that Snapdeal is looking to buy a small stake in the logistics firm for a deal amount of Rs 150-200 crore.

However, GoJavas refuted the story and said in response to an email query sent by iamWire, “Gojavas and Snapdeal have entered into a strategic partnership. We would like to clarify that this is not an acquisition or buy out as reported in some of the newspapers.” GoJavas was previously the logistics arm of online fashion retailer Jabong before being spun off into a separate entity.

GoJavas is an Indian supply chain solution provider that works with e-commerce firms like HealthKart, Jabong, LensKart, and Yepme, covers over 2,500 pincodes in the country. The company claims to be present in 100+ cities in India and is expanding rapidly. The firm was also looking to raise Rs 240 crore from PE players to fund the company expansion plans. It had also raised its authorized capital from a lakh rupees to Rs 2 crore in November 2014.

Apart from this, Snapdeal is also looking to acquire FreeCharge, an online mobile recharge & utility bill payment company, for a deal amount of Rs. 2,800 crore. The firm is in talks with China’s Alibaba and Taiwan’s Foxconn to secures $1 billion at a valuation of $6-7 billion and also it is negotiating to buy advertising media Komli Media for $300 million. Also, it plans to make five more acquisitions in the mobile and analytics space, over the course of upcoming fiscal.

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Snapdeal has already acquired 5 companies so far with the latest one being Exclusively.in, a site that sells designer brands, to strengthen its fashion business. The company also bought social product discovery platform Doozton in April and gifting recommendation venture Wishpicker in December 2014.

The others logistics firms are also getting traction among investors. For instance in 2014, e-commerce dedicated logistics solutions provider, Ecom Express had raised over Rs 100 crore from Peepul Capital. The rival firm Delhivery also raised USD 35 million in Series C led by Multiples Alternate Asset Management. The existing investors Nexus Venture Partners and Times Internet also participated in the round. Also, HoliSol, which specializes in 4 PL services, has raised USD 1.5 million.

In January this year, Indian distribution and supply chain solutions provider, Gati had also announced that it is planning to raise INR 120 crore for expansion of e-commerce business. To improve its logistics service in India, US-based company Amazon was planning to acquire 75 percent stake held by DHL Express Singapore PTE Ltd in courier and integrated package distribution company, Blue Dartfor a deal amount of USD 2 billion.

In August 2014, Deutsche Post DHL (DPDHL) had announced that it plans to invest around INR 800 crore in Indian e-commerce business including express (small parcel transportation), aviation, e-commerce and warehousing, in the next two years.

According to technology researcher Gartner Inc., online retail is expected to be worth $5 billion this year, a 70% increase over 2014 sales of $3.5 billlion. Logistics firms are among the supporting partners to gain the maximum out of this.

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