Shopify to buy Deliverr in $2.1bn deal

E-commerce platform Shopify has agreed to acquire San Francisco-based logistics services provider Deliverr for $2.1bn in cash and stock in a deal set to boost Shopify’s next-day delivery ambitions.

Shopify plans to integrate Deliverr into its Shopify Fulfillment Network (SFN), creating what it calls an end-to-end logistics network for independent brands. It will support Shop Promise, the company’s next-day and two-day delivery service. The deal will also give Shopify, which does not have much by way of large distribution centres and has typically relied on third-party fulfilment, its own large-scale network.

“Our goal is to not only level the playing field for independent businesses, but tilt it in their favour—turning their size and agility into their superpower,” said Shopify founder and chief executive Tobi Lütke.

“Together with Deliverr, Shopify Fulfillment Network 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.”

Founded in 2017, Deliverr provides logistics and fulfilment services for e-commerce merchants, using machine learning and data analytics to predict where buyers might be looking to buy goods and positioning them accordingly across its warehouse network to optimise delivery.

The combined company, Shopify said, will give merchants access to simplified multichannel inventory management, next-day or two-day delivery through an expanded network, predictive demand-driven inventory placement and logistics services that can be matched to users’ needs.

Deliverr already provides services to sellers on platforms including Amazon, Walmart, Target, Wish, Instagram, Facebook, eBay and Shopify itself.

The takeover marks the largest acquisition Shopify has made to date and puts it on better footing relative to Amazon, which has roughly doubled its own logistics network over the past few years.

Shopify’s other investments into logistics companies in recent years include participation in an Andreessen Horowitz and MSD Partners-led $935m series E round for logistics platform Flexport in February this year and the acquisition of warehousing and fulfilment technology provider 6 River for $450m in late 2019

The acquisition price tracks with Deliverr’s $2bn valuation at its latest funding round in November last year, a $250m series E round that featured logistics, real estate and investment management firm GLP. Tiger Global Management led the round with participation from 8VC, Activant Capital, Coatue Management and Brookfield Technology Partners.

GLP also participated in a $170m series D equity and debt round around this time last year, with Coatue Management leading the $135m equity portion with backing from Activant and 8VC while Brookfield Technology Partners provided $35m via convertible notes. Activant previously led a $40m series C round in early 2020.

Image courtesy of Deliverr