Shopify, the company that helps merchants build their e-commerce site, has announced that it’s buying Deliverr, which specializes in logistics, for $2.1 billion. After setting out to conquer China, Shopify now wants to compete with Amazon by offering May 5 delivery as the US giant’s fastest service.
Delivery in a day or two
Canada’s Shopify has announced plans to integrate Deliverr with its entire logistics network. The Wall Street Magazine The e-commerce company currently relies on 6 River Systems to manage its logistics. It acquired the warehouse automation startup in 2019 for $450 million.
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So Shopify would like to strengthen its logistics division with a new General Manager, Aaron Brown, as its head. With the acquisition of Deliverr, the company is taking back its network of order management software, developers, and many more industry professionals. Shopify will have more visibility and better control over its supply chain.
Third-party sellers on e-commerce websites use Deliverr to manage the delivery of their products. For the most part, these are sellers who have sold up to a million dollars in merchandise on platforms like Amazon, eBay, or Walmart. Deliverr is able to deliver goods in one or two days.
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This San Francisco-based logistics company was founded in 2017. In November 2021, Deliverr secured $240 million in funding during a fundraising round. Companies such as Activant Capital, Brookfield Technology Partners, and Coatue Management participated. This money valued the company at $2 billion, roughly the amount that Shopify spent.
During the Covid crisis, e-commerce platforms experienced an explosion in the number of sales. However, the deal comes during a slowdown in Shopify’s growth due to the end of closings. In the first quarter of 2022, the company’s revenue was down 22% compared to the same period in 2021.
Under the terms of the agreement, Shopify will own all outstanding shares in Deliverr. The $2.1 billion acquisition will be 80% cash. The rest of the money will be settled in the form of Shopify shares. The transaction will be completed after the agreement is reviewed by the regulatory authorities.