Shopify buys inventory management startup Deliverr for $2.1 billion

E-commerce platform Shopify is acquiring order and inventory management startup Deliverr in a $2.1 billion deal that will create an end-to-end logistics network combining the autonomous warehouse centers of Shopify with Deliverr’s third-party distribution partners.

Shopify, based in Ottawa, Canada, said the acquisition will increase access to overnight and next-day delivery services for merchants who store inventory and fulfill orders on the Shopify Fulfillment Network (SFN).

“Our goal is not just to level the playing field for independent businesses, but to tip them in their favor, making size and agility their superpower,” said Shopify CEO Toby. Lutke, in a blog post.

“With Deliverr, SFN will enable millions of growing businesses to access a simple and powerful logistics platform,” he added.

Deliverr, a San Francisco-based startup, ships over a million orders per month in the United States. The company’s AI-driven inventory management software and its network of third-party warehouses, carriers and last-mile partners will now be combined with Shopify’s large warehouse hubs in an end-to-end system.

Using predictive analytics and machine learning, Deliverr says its software anticipates product demand based on geography, among other variables. The platform then uses this analysis to “pre-position” inventory in its network of rented warehouses, relying on third-party logistics partners to pick, pack and deliver e-commerce orders.

Deliverr’s technology will power Shop Promise, a new Shopify service that will offer customers two-day and next-day delivery as well as expanded options for storage, freight, stock picking and returns.

“Our technology and expertise in inventory management, inventory placement and demand chain combine perfectly with Shopify’s roadmap,” Harish Abbott, co-founder and CEO of Deliverr, said in a statement. .

Contrasting with industry giant Amazon, Abbott said the combined platform would “democratize” execution for entrepreneurs.

“Shopify has built the future of merchant-focused fulfillment solutions, and our team has a reputation for helping businesses of all sizes streamline their operations,” he said. “We’re thrilled to join Shopify in its mission to improve commerce for everyone while democratizing shipping and fulfillment for independent entrepreneurs.”

Shopify’s acquisition of Deliverr follows the Canadian company’s $450 million purchase of 6 River Systems, a developer of cloud-based software and purpose-built mobile robots for fulfillment and delivery.

Deliverr was launched in 2017 and raised an estimated capital of $491 million. Under the acquisition agreement, Shopify said it would pay approximately 80% of the purchase price in cash and the remainder in Shopify Class A stock.