Commercial vehicle financier Shriram Transport Finance Company Ltd has invested Rs 6.99 crore ($1.09 million) to acquire a 17% stake in logistics solutions startup Freight Tiger, it said in a stock-exchange filing.
Shriram received 63,279 equity shares of Rs 1,106 apiece, including a premium of Rs 1,096, the filing revealed.
It was not clear how Freight Tiger intended to deploy the capital from what is possibly its first-ever external funding. E-mail queries to the startup didn't elicit an immediate response.
Mumbai-based Freight Commerce Solutions Pvt. Ltd, which operates Freight Tiger, was founded in 2014 by Swapnil Shah. The company operates a mobile app for truck-owners, brokers and logistics companies, helping them increase their truck utilisation and get efficient loads.
The company’s gross revenue fell 68% in FY16-17 to Rs 11.85 lakh from Rs 37.28 lakh in FY15-16, the filings show.
An alumnus of Harvard Business School, Shah earlier worked at US-based automotive technology firm Dana and logistics firm Caterpillar Logistics Inc.
Shriram Transport Finance is the commercial vehicle-financing arm of Shriram Capital, the lending business of diversified financial services firm Shriram Group. The stake buy is likely to generate enhanced business opportunities and income for Shriram Transport Finance's customers, who are primarily road transport operators. Indirectly, this may translate into better loan recovery for the company.
The logistics-tech sector has seen significant investment activity recently. Earlier this week, Delhi-based e-commerce logistics solutions provider Ecom Express raised Rs 192 crore ($30 million) from existing investor Warburg Pincus.
In August, TrucksFirst Services Pvt. Ltd, which operates Rivigo, was said to be in preliminary talks with Japanese investor SoftBank for a fresh funding round and was seeking a valuation of over $1 billion. In November 2016, Warburg Pincus had invested $75 million in Rivigo in its Series C round.
In May, Delhivery Pvt. Ltd raised Rs 200 crore from China’s Fosun International as part of a larger funding round.
In March, BlackBuck had raised $70 million in a Series C funding round. The round was led by Sands Capital with participation from existing investors Accel Partners and Flipkart.