Bertelsmann Next Makes Strategic Entry into Indian Market with Let's Transport Acquisition
Germany's Bertelsmann Next, the mid-market and acquisition investment vehicle of the global media, services, and education conglomerate Bertelsmann, has officially entered the Indian market. This move is marked by the acquisition of an 80% stake in the logistics marketplace Let's Transport, positioning it as the first portfolio company of Bertelsmann Next India (BNI).
A New Chapter for Indian Startups and Logistics
Pankaj Makkar, managing director of Bertelsmann India Investments (BII), who will lead BNI, highlighted the significance of this entry. "In the US and Europe, where the startup ecosystem is mature, founders prefer to work with conglomerates, where they get substantial benefits. That maturity has now come to India," Makkar stated in an interview. This acquisition signals a shift towards more strategic, long-term investments in the Indian mid-market sector.
Investment Strategy and Focus Areas
Bertelsmann Next typically invests in companies across mobile technology, HR tech, and pharma tech. However, with BNI, the focus will be on mid-market opportunities in India, with a different approach compared to its investments in Europe and the US. Makkar described the platform as "quasi-strategic, quasi-financial investors," noting that while venture capital units handle purely financial investments and other business arms manage strategic ones, Bertelsmann Next occupies the middle ground.
The platform's strategy involves thinking long-term with a sole focus on acquisition. It may start with a minority stake, but the ultimate goal is to hold a majority position, typically not lower than 20%. In India, the initial step is consolidating the logistics sector through the Let's Transport acquisition.
Consolidation and Future Plans
Bertelsmann has cleaned up Let's Transport's capital table, providing exits to investors such as Alteria Capital, Stride Ventures, and Rebright Partners. Over the next 18-24 months, BNI plans to consolidate its investment in Let's Transport through a series of acquisitions. The platform typically makes one to three acquisitions on an anchor investment before moving to create another large business in a different sector.
Makkar emphasized that BNI seeks companies that are either sector leaders or on their way there. "We're typically looking for companies that have already crossed two thresholds, product-market fit and go-to-market strategy," he said. "Any sector we invest in should have the ability to generate a billion dollars in revenue over 7 to 10 years."
Broader Investment Landscape and Synergies
Bertelsmann's corporate venture capital investments and the Next platform have collectively invested €2.1 billion since 2006, with over 320 active investments globally. In India, BII has invested in companies across services, education, logistics, and healthcare, including unicorns like Eruditus and Shiprocket, as well as firms like Inito, Licious, Pepperfry, and Scimplify.
Makkar clarified that investments made through BII will generally remain separate from BNI, with transfers being exceptions rather than the rule. "If there's a synergy between the startup and what we're trying to do, then yes. But, it's not going to be a natural path," he explained, citing Let's Transport as an example of such synergy.
Let's Transport's Growth and Rebranding
The acquired entity will be rebranded as Let's Transport Group. According to founder Pushkar Singh, the company currently generates $100-150 million in sales, growing at around 15% annually. The focus for the current year includes a new vertical: a partial loading business that allows shipments of up to 250 kg to access India's rural areas with faster turnaround times.
Singh also highlighted efforts to build ecosystem services for the trucker network, providing access to insurance, fuel cards, and tools at competitive rates. Additionally, the company is opening its trucking network to small and medium businesses, giving them access to a logistics ecosystem previously dominated by large companies. "This is how you typically bring down logistics costs in India," he noted.
Market Context and Investor Trends
Bertelsmann Next's entry into India coincides with a trend of increasing investor interest in mid-market companies. These investments are often sector-agnostic, driven by factors such as earning potential, strong revenues, growing market share, and disruptive capabilities. This move positions Bertelsmann to capitalize on India's evolving economic landscape, leveraging its global expertise to foster growth in key sectors like logistics.
