Shadowfax transforms into public entity, prepares for IPO launch

188

Shadowfax, a Bengaluru-based logistics startup, has taken a significant step towards going public by converting from a private limited company to a public entity, prepares IPO launch. The company’s board approved the change, renaming it from “Shadowfax Technologies Private Limited” to “Shadowfax Technologies Limited,” signaling its readiness for an initial public offering (IPO). Industry reports suggest that the IPO could raise between Rs 2,500 crore and Rs 3,000 crore later this year.

Founded in 2015 by IIT Delhi alumni Abhishek Bansal, Vaibhav Khandelwal, Praharsh Chandra, and Gaurav Jaithliya, Shadowfax has evolved from a hyperlocal delivery platform into a full-fledged third-party logistics provider, serving major e-commerce firms like Flipkart, Meesho, and Nykaa. The startup reported a 33.2% year-on-year revenue growth to Rs 1,885 crore in FY24 while significantly reducing its net loss to Rs 11.8 crore from Rs 142.6 crore in FY23.

Shadowfax has secured $246 million in funding so far, with key investors including Eight Roads Ventures, Flipkart, TPG NewQuest, Mirae Asset, and Nokia Growth Partners. The company has appointed ICICI Securities, JM Financial, and Morgan Stanley as lead managers for the IPO. As part of its preparation for the public listing, Shadowfax recently strengthened its board by appointing industry veterans such as Bijou Kurien, Ruchira Shukla, and Pirojshaw Sarkari as independent directors.

1. Shadowfax’s Business Model and Services

1.1 Overview of Shadowfax’s Operations

Shadowfax operates as a third-party logistics service provider, catering to businesses across e-commerce, food delivery, pharmacy, and other sectors. The company initially started as a hyperlocal delivery service but gradually expanded into intercity logistics, same-day delivery, and 30-minute delivery solutions.

1.2 Revenue Model

The startup primarily earns revenue through:

• Per-order commission: Fees charged for each delivery based on distance and service type.
• Subscription-based partnerships: Long-term contracts with businesses ensuring recurring revenue.
• Freight and warehousing services: Additional revenue streams from inventory management and bulk shipments.

2. Founders and Funding History

2.1 Founding Team and Background

Shadowfax was co-founded in 2015 by Abhishek Bansal, Vaibhav Khandelwal, Praharsh Chandra, and Gaurav Jaithliya. The founders, IIT Delhi alumni, leveraged their experience in technology, logistics, and e-commerce to build a scalable logistics network.

2.2 Funding Milestones

To date, Shadowfax has raised $246 million in funding. Key funding rounds include:

• February 2025: $16.8 million from Mirae Asset and Nokia Growth Partners (extended Series F round).
• 2024: Rs 400 crore funding from Edelweiss Discovery Fund and high-net-worth individuals.
• Previous rounds: Investments from Flipkart, Eight Roads Ventures, and TPG NewQuest.

3. Financial Performance and Growth

3.1 Revenue and Profitability Trends

Shadowfax has consistently grown its financial performance:

• FY24 Revenue: Rs 1,885 crore, marking a 33.2% year-on-year increase.
• FY24 Net Loss: Reduced by 91.7% to Rs 11.8 crore from Rs 142.6 crore in FY23.
• EBITDA Profitability: Shadowfax recorded an operating profit of Rs 23 crore in FY24.

4. IPO Plans and Market Strategy

4.1 Shadowfax Prepares IPO Launch

The conversion to a public entity was approved in an extraordinary general meeting (EGM) on March 6, paving the way for its IPO. The startup is expected to file its draft red herring prospectus (DRHP) in the coming months.

4.2 Lead Bankers and Investor Sentiment

The company has appointed ICICI Securities, JM Financial, and Morgan Stanley as lead managers for the IPO. Investor confidence remains high, given its steady growth and market positioning.

4.3 Market Outlook and Competitor Landscape

Shadowfax operates in an increasingly competitive market with players like Delhivery, Ecom Express, and Xpressbees. However, its strong e-commerce partnerships and technology-driven logistics solutions provide a competitive edge.

5. Learning for Startups and Entrepreneurs

5.1 Importance of Business Model Evolution

Shadowfax’s journey from a hyperlocal delivery startup to a full-scale logistics provider underscores the need for continuous adaptation in a competitive market.

5.2 Financial Discipline and Growth Strategy

Achieving EBITDA profitability before going public enhances investor confidence. Startups must focus on sustainable growth and cost management.

5.3 Strategic Partnerships for Scalability

Collaborating with industry leaders like Flipkart and Nykaa has fueled Shadowfax’s expansion. Entrepreneurs should leverage partnerships to scale their businesses effectively.

About The Startups News

At The Startups News, we bring you the latest insights on startup IPOs, funding rounds, and industry trends. Our expert coverage ensures you stay ahead in the dynamic world of entrepreneurship. From emerging unicorns to disruptive tech startups, we provide in-depth analysis to help businesses and investors make informed decisions. Stay updated with us for exclusive reports on India’s booming startup ecosystem.