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Bengaluru-based B2B logistics services provider Spoton is eyeing acquisitions as it firms up entry into the third party logistics (or 3PL) business over the next 6-9 months.
Typically, 3PL providers specialise in integrated operations of warehousing and transportation services that can be scaled-up.
The ₹630-crore start-up is a B2B logistics service provider that operates primarily as an express cargo operator (roads).
It plans to launch air-cargo services from June.
About 60 per cent of Spoton’s revenue comes from clients across sectors such as automobile and pharmaceuticals. E-commerce accounts for 5-7 per cent of its revenue.
GST benefits
According to Abhik Mitra, Managing Director and CEO, Spoton Logistics, 3PL business has emerged as a huge market especially with the roll-out of GST.
Companies are looking at 3PL players to take care of their entire gamut of warehousing and transporting solutions rather than just opting for carrying and forwarding agents.
“Our foray in 3PL will probably be through an acquisition. We are looking around. Maybe, we will be finalising something over the next 6-9 months,” he told BusinessLine.
Supply chain management has also changed after GST roll-out.
Warehouse consolidation is happening. From multiple smaller warehouses in a number of States, Mitra says, companies are looking at a lesser number of warehouses which are larger in size.
Acquisitions will vary in size between the “₹100-crore and ₹200-crore bracket,” Mitra says. But, apart from size, the acquiring company should have a “good synergy” with the existing operations of Spoton.
Target acquisition
“Synergy of ops is important,” he said adding that funds won’t be problem.
Spoton, has about 4,000 clients including Reliance, Bosch and e-commerce companies Flipkart and Amazon. It was recently acquired by a Samara Capital-led consortium of investors from PE firm, India Equity Partners.
It was established in January 2012, a month after India Equity Partners acquired the road express business of Dutch express deliverer TNT Logistics.
The express logistics company has 28 hubs across India that includes cities like Mumbai, Delhi, Kolkata; and 290-odd service centres.
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