Shopify, the company that helps merchants build their ecommerce sites, has announced it wants to buy logistics specialist Deliverr for $2.1 billion. After leaving for the conquering China Shopify now wants to compete with Amazon by offering, on May 5, a delivery service as fast as that of the American giant.
Shipping parcels in one or two days
Canadian company Shopify has announced plans to merge Deliverr with its entire logistics network. The Wall Street Journal recalls that the ecommerce company currently depends on 6 River Systems to manage its logistics. It had acquired this start-up specializing in warehouse automation in 2019 for $450 million.
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Shopify so wants to strengthen its logistics division with a new CEO Aaron Brown at the helm. By acquiring Deliverr, the company gets back its order management software network, developers and many industry specialists. Shopify will have more visibility and control over its supply chain.
Third-party sellers on ecommerce sites rely on Deliverr to manage the delivery of their products. Most of them are sellers who have sold up to $1 million worth of goods on platforms like Amazon, eBay or Walmart. Deliverr is able to deliver the goods in one or two days.
Shopify impacted by the end of lockdown
This San Francisco-based logistics company was founded in 2017. In November 2021, Deliverr secured $240 million in funding in a capital raise. Firms including Activant Capital, Brookfield Technology Partners and Coatue Management participated. These financings valued the company at $2 billion, roughly the amount spent by Shopify.
During the Covid crisis, ecommerce platforms had seen an explosion in the number of sales. The deal, however, comes during a slowdown in Shopify’s growth caused by the end of confinements. In the first quarter of 2022, the company’s sales were down 22% compared to the same period in 2021.
Under the terms of the deal, Shopify will own all of Deliverr’s outstanding shares. The $2.1 billion buyout will be 80% cash. The remainder will be settled in Shopify stock. The deal will be finalized after regulatory review of the agreement.
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