Private equity firm Warburg Pincus has agreed to invest up to $125 million (Rs 835 crore) in a logistics startup floated by Anshuman Singh, who until recently headed the supply chain arm of retailer Kishore Biyani’s Future Group.
Singh started Stellar Value Chain Solutions Pvt. Ltd only last month after quitting as the managing director and CEO of Future Supply Chains Solutions Ltd, where he worked for nearly a decade. His last day at Future Supply was 31 July.
The new company will provide multi-user warehousing, distribution, e-fulfilment and cold storage facilities to companies in the food and beverages, consumer goods, consumer durables, electronics, lifestyle, automotive, pharmaceuticals and engineering industries. Future Supply Chain also focuses on many of these industries.
“Our solutions will help customers realign their supply chain networks and unlock value, especially following the implementation of the goods and services tax,†Singh said in a statement.
Singh’s deal with Warburg Pincus comes after Singapore's distressed assets fund management firm SSG Capital Management Group agreed to acquire a 40% stake in Future Supply in April.
For Warburg, this demonstrates its bias toward the Indian logistics sector. The firm said the deal with Singh is part of a strategy to drive consolidation in the third-party logistics sector in India through Stellar Value Chain.
“We believe there is a shortage of high-quality providers of outsourced logistics services such as warehouse management and distribution to a wide range of sectors in India. Anshuman brings deep domain expertise and a strong track-record of execution and value creation in this industry,†said Viraj Sawhney, managing director at Warburg Pincus.
The PE firm had previously also made large bets on Indian logistics companies. In June last year, Warburg invested $133 million in e-commerce logistics startup Ecom Express. In October 2015, it set up a $250 million joint venture with developer Embassy Parks to build warehouses and industrial parks.
The PE firm has also begun the process of exiting some of its logistics investments. VCCircle reported last month that Warburg Pincus-backed Continental Warehousing is planning an initial public offering and has hired bankers.
This is not the first time the PE firm has bet a large sum of money on a person. The firm led a $600 million round in Delonex Energy, a startup floated by former Cairn India chief Rahul Dhir three years ago.
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