$100M start-up shuts shop with $250K fire sale
LogiNext Solutions, a logistics software-as-a-service (SaaS) start-up based in Mumbai and New Jersey, has undergone a dramatic shift in its operations. After securing $50 million across multiple funding rounds, the company has seemingly shut down and sold its assets to a Delaware-registered entity called Stellation Inc. for a meager sum of $250,000, as per the Economic Times. The start-up was backed by prominent names, including Tiger Global and Steadview Capital.
LogiNext's assets and client contracts transferred
The assets sold by LogiNext include its software, hardware, all subsidiaries, customers, and vendor contracts. As part of a board resolution passed on July 8, the company will cease using the LogiNext brand and transfer all its client contracts to Stellation. "All the contracts will now be under the entity name Stellation," a person familiar with the matter told the Economic Times.
LogiNext's financial situation and shareholder returns
The board resolution stated that the amount to be given out to the stockholders was not expected to exceed the aggregate liquidation preference of the company's preferred stock. Consequently, it was not anticipated that any remaining assets would be distributed to holders of common stock. LogiNext has returned nearly $8-9 million from its reserves to Tiger Global and Steadview, setting aside another $2 million as working capital.
LogiNext's journey and market challenges
LogiNext was established in 2014 by Dhruvil Sanghvi and Manisha Raisinghani, alumni of Carnegie Mellon University. The company provides software products to automate deliveries across various sectors including retail, e-commerce, consumer packaged goods, food and beverages. Its client list features prominent names like KFC, Pizza Hut, Starbucks, Burger King and McDonald's. In 2020, LogiNext secured its largest funding of $39 million in a round led by Tiger Global and Steadview Capital at a valuation of $100 million.
Early investors and internal disagreements
Alibaba and Paytm were early investors in LogiNext but sold their stakes during the 2020 fundraise. At its last board meeting, Tiger Global, which owned around 50% in LogiNext, Steadview and Sanghvi were in favor of the sale. Raisinghani was opposed to it as she believed that the company could secure a higher price. However, shareholders supported the transaction as Stellation was assuming the company's liabilities.
