Shopify acquires, a San Francisco, California-based e-commerce fulfillment startup, Deliverr for $2.1 billion in cash and stock, the largest acquisition in Shopify’s history.
Under the acquisition agreement, Shopify said it will pay about 80% of the purchase price in cash (~$1.68 billion) and 20% (~$420 million) in Shopify Class A shares.
“The acquisition will enable the company to create an ‘end-to-end logistics’ platform for millions of merchants. Our goal is to not only level the playing field for independent businesses, but tilt it in their favor — turning their size and agility into their superpower. Together with Deliverr, SFN will give millions of growing businesses access to a simple, powerful logistics platform that will allow them to make their customers happy over and over again.”Tobi Lütke, Founder and CEO, Shopify
According to Shopify, Deliverr will combine with Shopify Fulfillment Network (SFN) to strengthen SFN’s merchant inventory management capabilities. Further, Deliverr’s technology will power Shop Promise, a new service introduced by Shopify that will provide customers with two-day and next-day delivery, as well as expanded options for storage, freight, inventory preparation, and returns.
“Our technology and expertise in inventory management, inventory placement, and demand chain combine perfectly with Shopify’s roadmap, enabling us to now build an end-to-end logistics platform together. Shopify has been building the future of merchant-first fulfillment solutions, and our team has a track record of helping businesses of all sizes streamline their operations. We’re excited to join Shopify in their mission to make commerce better for everyone while democratizing shipping and fulfillment for independent entrepreneurs.”Harish Abbott, Co-founder and CEO, Deliverr
Delivery was co-founded by former Symphony Commerce colleagues Abbott and Michael Krakaris in 2017 and had raised $490.9 million in the capital before the Shopify purchase. The last funding round, a $240 million Series F led by Tiger Global, valued the company at $2 billion post-money.
Using predictive analytics and machine learning, Deliverr, which rents out warehouse space and uses warehouses’ fulfillment departments to pick and pack e-commerce orders, anticipates the demand for products based on geography and other variables. The platform then uses the analysis to “pre-position” items close to areas of demand, stocking items across its network of warehouses and sort centers and determining the best delivery method to ship to customers.