Flipkart-backed hyperlocal logistics startup Shadowfax is in advanced stages of closing a funding round of $45-50 million that is likely to double its valuation to $700 million, multiple people in the know said. This will be the Bengaluru-based company’s last private round prior to its initial public offering (IPO), they said. Domestic family offices, mutual funds and high-net-worth individuals (HNIs) who are typically onboarded prior to a public issue will join the capitalisation table of Shadowfax, which specialises in quick commerce and same-day ecommerce deliveries, in this round, they added.

Wealth managers such as Nuvama and InCred, who pool investment deals for their private clients, have also held discussions with Shadowfax for this round, but the company plans to finalise its investors in the coming few weeks, the people said. Shadowfax had closed a $100-million round this February in a mix of primary and secondary investments as part of a funding round led by growth investor TPG NewQuest. This round valued the company at $350 million.

“They were looking to raise around $30-35 million in this round but given the interest in the firm because of its IPO plans and the quick commerce exposure, there is adequate demand for the round to be expanded,” a person aware of the matter. “The idea is to set the valuation before filing for the IPO. That (draft IPO papers) should also happen this financial year,” another person briefed on the plans said. The increase in the funding round may also see some investor part-sell stake in a secondary share sale. “Both new and existing investors will participate in the round,” the second person quoted above said. Founded in 2015 by IIT Delhi alumni Abhishek Bansal, Vaibhav Khandelwal, Praharsh Chandra and Gaurav Jaithliya, Shadowfax has transitioned to serving ecommerce clientele such as Meesho from initially being an on-demand logistics provider for food-delivery platforms. Bansal declined to comment on fundraise plans.

Jewellery maker Bluestone is also looking to file its draft IPO papers this financial year. It closed a Rs 900-crore pre-IPO round at a valuation of Rs 810 billion, as ET reported in August. The year has already seen several IPOs by new-age firms including Ola Electric, FirstCry, Awfis and Ixigo.

Shadowfax is seeing massive traction emerging from rapid deliveries with several brands and platforms moving to offer same-day and even faster delivery to customers across the country. The company delivers 2-2.5 million packages per day and has a network of 1.6 billion monthly active delivery partners. One of the persons briefed on the company’s plans said that part of the primary capital being raised will be deployed towards Shadowfax’s expansion of its quick commerce operations. “Shadowfax wants to strengthen its balance sheet before the IPO…but it is also planning to rapidly invest in quick commerce, dark store operations and same-day delivery,” the person said.

“The broader quick commerce sector is seeing a lot of interest from investors, which is why Shadowfax is also raising this money to expand its footprint, given it currently works with several quick commerce, ecommerce companies and D2C brands to enable same day deliveries,” he added. In FY24, Shadowfax clocked Rs 190 billion in operating revenue – a 35% increase from the previous fiscal, one of the sources said, adding that FY25 could see the top line rising up to around Rs 25 billion. Presently, quick commerce and hyperlocal deliveries contribute to around 25% of the company’s business, which could grow to 35-40% share in the coming year. Even within the remaining 75% of the revenue, which comes from servicing ecommerce and direct-to-consumer brands, the bulk of the contribution is from same-day deliveries. Under its quick commerce services, Shadowfax offers manpower and fleet management to platforms and brands to operate last-mile deliveries and manage dark stores.