Delhivery To Make A Strategic Investment In Retail Tech Firm Vinculum

Delhivery Ltd, the logistics firm, will make a strategic investment in Vinculum, a technology firm enabling omnichannel retailing for direct-to-consumer(D2C) enterprises, brands, brand distributors, and quick commerce companies. The investment is the first part of a potential 2-stage deal that provides Gurugram-based Delhivery with the option to further increase its shareholding in the company after six months. The companies didn’t reveal the value of the transaction.

"Vinculum has built a world-class product that enables omnichannel retailing for brands, retailers while also powering fulfilment capabilities of 3PLs (third-party logistics) and online marketplaces,” said Rajaganesh S, head of supply chain solutions at Delhivery. “A strategic partnership with Vinculum strengthens Delhivery’s fulfillment solution to brands.”

Direct-to-consumer enterprises are a focus market for Delhivery, and the investment is expected to strengthen its position as a leading fulfillment solutions provider in the segment. Through this investment, the two companies will build a complete integrated stack to address the entire range of post-purchase needs of a D2C brand. A deeper integration with Vinculum’s industry-leading Order Management System (OMS) will be a first-of-its-kind fully-integrated E2E offering.

“This (investment) lays the foundation for deep tech integration between both companies, tremendous collaboration opportunities, and immense business value for our customers,” said Venkat Nott, founder, and chief executive officer of Vinculum Group.

The investment is subject to the satisfactory completion of closing conditions.

Vinculum is one of the early software companies from India, enabling brands to tap into the opportunity presented by e-commerce and Omni Channel. With the post covid industry and consumer shift, the company has scaled up into a leading SaaS (software-as-a-service) omni-channel software company. It is working with over 400 brands across grocery & FMCG, healthcare, beauty, cosmetics, fashion, and jewelry in India, South East Asia, and the Middle East markets.

Delhivery, on Friday, reported a widening in consolidated net loss at Rs 159 crore for the March quarter. The company reported a net loss of Rs 120 crore a year ago.

The company’s consolidated total income from operation fell by 9 per cent to Rs 1,934 crore for the March quarter as compared to Rs 2,127 crore in the year-ago period.

In a regulatory filing, the company said, “Adjusted EBITDA margin improved to 0.3 per cent in Q4FY23, against -3.7 per cent in Q3FY23 and incremental gross margin in the core express parcel and PTL (partial truckload) businesses continued to be above 50 per cent.”

This margin improvement was driven by a combination of factors including continued improvement in network capacity utilisation. Other factors included technology-driven cost optimisation in fleet operations and improvement in revenue and margin quality across customer segments.

The company has also opened up its internal and third-party demand to brokers and fleet owners through its Full Truckload Exchange (Orion). The company has also reported growth in Express Parcel volumes by 10 million shipments QoQ to 180 million shipments in Q4FY23 from 170 million shipments in Q3FY23 despite Q3 being a seasonally strong quarter with festive sales.

Corresponding revenue stood at Rs 1,177 crore in Q4 FY23 against Rs 1,200 crore in Q3FY23. Revenue from PTL services grew 19 per cent QoQ to Rs 328 crore in Q4 FY23 from Rs 277 crore in Q3FY23 due to increased volumes, gained through consistently high service quality. PTL volumes grew 23 per cent QoQ to 318K tonnes in Q4 FY23 from 258K tonnes in Q3 FY23.