Last week, the Indian startup ecosystem witnessed a different kind of distress sale. Typically speaking, such deals involve companies going through a downturn, but this time it was for an IPO-bound company — Ecom Express.

Listed major Delhivery informed stock exchanges that it is acquiring 99.4% stake in Ecom Express for INR 1,407 Cr ($165 Mn), an almost 80% valuation drop from Ecom Express’s last valuation of INR 7,300 Cr ($850 Mn).

The deal will go down in history for two reasons. Firstly, this distress sale is arguably the most severe of its kind in Indian startup history. Global marquee investors are expected to take a massive loss in the exit — as we will see.

And the second: Delhivery, an arch rival for Ecom Express, is the one giving some form of a lifeboat and in the process acquiring a bigger piece of the market share. However, as a result of this acquisition there are grave consequences in store for thousands of employees at Ecom Express, who are likely to take the worst hit in this deal.

If we have to track the distress for Ecom Express, we have to go back to the company’s initial plan in February 2022 for an IPO, which was eventually shelved.

This was soon followed by the tragic loss of CEO TA Krishnan in 2023. And almost immediately after that Ecom Express found itself without its biggest customer. This is how the past 14 months have unfolded for the company:

• February 2024: Meesho, Ecom Express’ biggest customer, launches an in-house logistics vertical Valmo
• June 2024: Ecom Express shelves plans to raise INR 400 Cr at $1 Bn valuation from existing investors, raises INR 1,400 Cr via rights issue
• August 2024: Refiles IPO papers with an aim to raise INR 2,600 Cr from public market after withdrawing first bid in 2022
• September 2024: Delhivery alleges Ecom Express inflated shipment numbers and hiding costs in its representations to investors and regulators
• December 2024: Meesho reduced almost 40%-50% of shipment volume with Ecom Express
• January 2025: Several Ecom Express clients, including Reliance and Amazon, significantly reduced their orders, according to sources
• February 2025: Shelves IPO plans for a second time; over 500 employees laid off and 1,000 delivery centres shut down
• March 2025: Archrival Delhivery announces acquiring 99.4% stake in Ecom Express for nearly half of its targeted IPO valuation

Ecom Express, which claims to have handled over 2 Bn shipments since inception and reached around 97% of the country’s population, is in a dire situation, with revenue declining in FY25 and losses growing.

What exactly went wrong for Ecom Express, especially after it was one of the first companies in this space to hit profitability?

Delhivery, Ecom Express, and its investors, such as Partners Group, Warburg Pincus, and British Investment International, did not respond to Inc42’s queries.

Ecom Express’ Missed Growth Curve

Founded in 2012 by the late TA Krishnan, Manju Dhawan, K Satyanarayana and Sanjeev Saxena, Ecom Express offers shipping and fulfilment services for ecommerce brands and B2C marketplaces. It claims to have 3,000 delivery centres with a network that spans 2,700 cities and towns across India.

Till date, it has raised more than $324 Mn in funding from global marquee VCs and private equity funds, including Warburg Pincus, British International Investments (BII), Partners Group and others, across 12 funding rounds, and was last valued at around $850 Mn in 2022.

In fact, Ecom even turned profitable in FY21,........

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