Shadowfax

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The proposed IFC investment is an equity subscription in Shadowfax Technologies Private Limited (“Shadowfax” or “the Company”). Shadowfax is an Indian technology based last-mile express logistics company serving clients across food, grocery, pharmacy and ecommerce. It is headquartered in Bangalore, India with regional offices in Delhi, Mumbai and Hyderabad. IFC funds are expected to be deployed for expansion to new cities and customers, sales and marketing, and to build new products and rolls out more API integrations with new/existing clients. Shadowfax enters into service delivery agreements with merchants (“Clients”) for providing service across four major verticals (food, pharmacy, groceries and e-commerce) for pickup (reverse logistics) and delivery services. The agreements describe the minimum quality levels of service to be provided by the Company. The delivery models could be a 90 minutes delivery (called “Now”), same day delivery (called “Insta”) or next day delivery (called “Connect”). Once the agreement is arrived at, the Company integrates its backend Application Program Interface (API) with a similar API interface of the Client and the orders are thereafter automatically received by the Company through this bridge. The API integration involves creating processes/rules/logic for when a specific information will pass to Shadowfax (e.g. as soon as end user places order on Client’s delivery app, automatically order details are sent to Shadowfax to process delivery). This is effectively an automated communication process – where Client’s system instantly sends Shadowfax the details of an order that Shadowfax delivers for the Client and Shadowfax sends back updates like delivery partner details and status of order as and when necessary - through the API.For managing the deliveries, Shadowfax engages freelance delivery Partners (“partners” or “bikers” or “business associates”) on a principal to principal basis. The delivery partners download and register on the Shadowfax Partner app (“platform” or “Shadowfax app” or “Company app”) through their smartphones and agree to provide services on freewill.The Shadowfax app then auto allocates the orders to the available Partners, whoever is active on the platform to meet the service requirements agreed with the Clients. Multiplicity of client’s orders, across multiple delivery products are matched with available partners through complex network operations algorithms.Under the current operations, the delivery service is provided by a registered delivery partner through the company’s mobile application. Any member of public who is above 18 years of age and owns a vehicle can register with the company as a delivery partner after meeting the eligibility criteria and passing the background checks. Once registered, the partners are then free to accept pickup/delivery requests from the Shadowfax mobile app. This is explained in the delivery partner’s service agreement which is digitally signed by the delivery partner on the mobile application at the time of registration. The company has an extensive network of 30,000+ delivery partners who have their own vehicles and are providing services.Shadowfax also has a franchise model under which it engages with local courier companies and provision stores on a contractual basis. Shadowfax enrols these businesses as its franchisee and provides them access to the portal to enable them take orders and deliver products on behalf of Shadowfax. The responsibility of engaging workers and ensuring compliance related to labour laws is that of the franchisee company as clearly identified in the agreements.At present, company’s operational assets include its corporate office in Bangalore, four regional offices, two regional distribution centres, two training centres and hubs in various cities all of which are leased/rented spaces. The company does not have any other assets or buildings and it does not own any vehicles used for delivery. This is IFC’s first investment in Shadowfax.