Shopify, the company that helps merchants create their e-commerce site, has announced that it wants to buy Deliverr, which specializes in logistics, for 2.1 billion dollars. After setting out to conquer China, Shopify now wants to compete with Amazon by offering, on May 5, a delivery service as fast as that of the American giant.
Delivery 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 e-commerce company currently depends on 6 River Systems for the management of its logistics. It had acquired this start-up specializing in warehouse automation in 2019 for 450 million dollars.
Starbucks sees NFTs as a new way to build loyalty
Shopify therefore wishes to strengthen its logistics division with a new general manager, Aaron Brown, as its head. By acquiring Deliverr, the company recovers its network of order management software, developers and numerous specialists in the sector. Shopify will have more visibility and better control over its supply chain.
Third-party sellers on e-commerce sites use Deliverr to manage the delivery of their products. For the most part, these are sellers who have sold up to $1 million in merchandise 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 confinements
This San Francisco-based logistics company was founded in 2017. In November 2021, Deliverr secured $240 million in funding during a fundraising round. Companies like Activant Capital, Brookfield Technology Partners and Coatue Management participated. These fundings valued the company at $2 billion, roughly the amount Shopify spent.
During the Covid crisis, e-commerce platforms experienced an explosion in the number of sales. The deal, however, comes during a slowdown in Shopify’s growth caused by the end of the lockdowns. In the first quarter of 2022, the company’s revenue decreased by 22% compared to the same period in 2021.
Under the terms of the agreement, Shopify will own all outstanding shares of Deliverr. The redemption at 2.1 billion dollars will be 80% in cash. The rest of the money will be settled in the form of shares of Shopify. The transaction will be finalized after review of the agreement by the regulatory authorities.