Indian logistics giant Ecom Express Ltd will invest Tk100 crore in a Bangladeshi home delivery platform Paperfly.
Ecom Express will buy major shares of Paperly and work to deliver e-commerce services to remote areas of Bangladesh.
Paperfly officials told The Business Standard that there will, however, be no change in its management.
Paperfly now provides services to 4,456 unions through its more than 100 service points across the country.
The investment agreement was signed between the two companies in Dhaka on Tuesday. The Indian company will expand its business by adding new investment equity to the existing networks of the Bangladeshi company.
Ecom Express delivers goods to 1 million people daily through 2,900 service points in 2,650 cities under more than 20 states in India. This is the first overseas investment of the company.
Speaking on the investment and partnership, Shahriar Hasan, Founder & CEO of Paperfly, said the Bangladesh's logistics industry must evolve in many folds to keep up with the modern purchase behaviour from an increasingly digitised society.
"The partnership with Ecom Express will enhance our credibility and we look forward to consolidating Bangladesh's logistics landscape further and for the better."
In Bangladesh, the number of investments in local e-commerce companies from their foreign counterparts has increased.
Chinese e-commerce giant Alibaba is in talks with HungryNaki to buy the local food delivery firm, industry officials said.
The talks are still at the primary stage.
It would be the third investment in Bangladesh by Alibaba after acquiring Daraz and buying 20% share of bKash Limited in 2018 by Alipay, Chinese mobile payment giant owned by Alibaba Group.
In 2018, Gojek Singapore, which holds an 18.67% stake in Pathao through subsidiary Ojek Motor Bangladesh, provided $13 million in loans to Pathao.
Established in 2016, Paperfly is the top logistics company in terms of setting up service points in the country. The company currently provides cash on delivery service for products ordered online.
Paperfly is known for delivering products to customers in remote areas outside Dhaka through the online media including Facebook.
The company has more than 1 thousand deliverymen across the country.
Claiming to be the top organisation in terms of service points and as a third party provider, Paperfly officials believe that the new foreign investment will bring big changes in the logistics sector in Bangladesh.
Rahath Ahmed, co-founder and chief marketing officer, Paperfly, said: "Unlike other logistics organisations, our exceptional feature is that 85% of our deliverymen are for providing services outside of Dhaka."
The initiative aims to provide products to entrepreneurs in remote areas, added the official.
Rahath thinks the sector could grow into more than 10% of the country's GDP if technology is developed to deliver products quickly.
Ecom Express CEO and Co-Founder TA Krishnan said Paperfly has established itself as a prominent enabler to online businesses through its strong logistics experience and entrepreneurial leadership team.
"Our investment is an opportunity to partner with the company that is delivering rapid growth in the home delivery space while building a robust and sustainable operation for the long term."
"We look forward to unlocking Paperfly's potential to provide superior customer experiences across its supply value chain by integrating e-commerce, logistics and technology ecosystem," he added.
Founded in 2016 by Shahriar Hasan, Razibul Islam, Rahath Ahmed and Shamsuddin Ahmed, Paperfly had introduced many innovations like Smart return, Smart check, Smart log, In-app call and CashlessPay to enable the power of e-commerce industry in Bangladesh over the past 5 years.
Shamsuddin Ahmed, co-founder and chief technology officer, Paperfly, said there is a lot to be done, not only in e-commerce logistics, but also in the traditional courier arena in terms of cost efficiency and customer service.
"Our aim is to establish Paperfly as the largest network of connected logistics, which is able to meet the needs of any enterprise, customers or e-commerce. The deal with Ecom Express is a big step forward and a proof to the credibility that we have built over the years."
At present, more than 50,000 online merchants in Bangladesh are conducting their business using the Facebook platform. There are 1,270 companies operating business after being registered for e-commerce and becoming members of e-Cab.
Hundreds of delivery service providers have also been formed to deliver the products of these companies to their customers.
Around 45,000 deliverymen are working for at least 30 organisations including Evaly, Pathao Food, Foodpeon, Daraz, Chaldal, HungryNaki, MeenaClick, Sohoj to deliver products to their customers.