Future Logistics raises $30 m

Kishore Biyani-led Future Group’s logistics and supply chain vertical has received a $30 million private equity placement from Fung Capital.

The firm is a private equity arm of the Fung family, the controlling shareholders of Hong Kong-based Li & Fung Group.

Speaking to DNA Money from Hong Kong, Kishore Biyani, Group CEO, Future Group, “We are trying to build one of the best supply chain solutions for the country. The money raised will be utilised towards enhancing the technology and other areas of the business.

This will eventually help the company expand and build on efficiencies to meet the future supply chain challenges. The expansion will be largely organic.”

Biyani also said the company was “quite far” from listing the entity.

The logistics vertical currently operates 30 distinct supply chains, servicing over 1,100 retail outlets across India. The facility manages more than 2.6 million stock keeping units (SKUs) from a warehousing network spread over 30 lakh sq ft in 30 major centres in India. It has a fleet of over 500 vehicles.

Post the investment, Future Group will also rename the subsidiary as Future Supply Chain Solutions.

According to CEO Anshuman Singh, despite supply chain being a critical support for the rapidly growing economy, its scope at present is limited.

“Reducing the time-to-market and cost-to-market for fashion and apparel and other consumer categories is what we want to focus on in a big way,” he said.

The Indian logistics market is estimated to be about $100 billion, with the share of organised players being just 6% of the total market.

The logistics sector has seen substantial investments lately and the organised segment is expected to grow at 25-30% CAGR over the next few years.

The consumption product supply chain is estimated to be around 20% of the logistics market and is at a nascent stage. Future Group’s logistics vertical hopes to capture a dominant share in this segment as a third-party logistics service provider.