Shopify, a Canadian e-commerce platform for selling online has taken the bold step of acquiring Deliverr. Shopify is in need to strengthen its position globally and this acquisition will help them do so.
Shopify has bought Deliverr for 2,000 million euros. The company is a delivery service that uses Shopify as its platform.
Why did Shopify pay 2,000 million euros for Deliverr?
Shopify paid 2,100 million dollars (2,000 million euros) to acquire Deliverr, a last-mile delivery service. This is Shopify’s biggest purchase in its history, a gamble on which the company hopes to build a logistics network on which millions of its merchants can handle their shipments.
Deliverr is purchased by Shopify to enable its fulfillment service.
In a statement, Tobi Lütke, founder and CEO of Shopify, stated, “Our objective is not simply to level the game changer for independent enterprises, but to tilt it in their favor, making their agility and scale their strength.” «With Deliverr, Shopify’s fulfillment service will provide millions of developing companies with a simple and powerful logistics platform that will enable them to delight their consumers over and again.”
This implies Deliverr will combine with Shopify fulfillment Network (SFN), a fulfillment service that allows retailers to store goods and dispatch orders. Deliverr will improve inventory management capabilities, as well as Shop Promise, a new service that will give consumers with delivery in two days or the following day, as well as additional choices for storing, transporting, and preparing merchandise, as well as managing returns.
Deliverr, an American company founded in 2017, has developed an intelligent system that can predict where consumers might be interested in purchasing products and then use that information to “position” items in their warehouses according to demand, determining the best delivery method for shipment to the end customer.
Deliverr has collected roughly 490 million dollars (more than 460 million euros) in financing before being acquired by Shopify, and its most recent Series F round took in $240 million (€227 million), giving it a value of €2 billion. Shopify will pay around 80% in cash and 20% in Class A shares.
“Our inventory, location, and demand chain management technologies and expertise align seamlessly with Shopify’s strategy, enabling us to develop a full logistics platform together,” said Harish Abbott, co-founder and CEO of Deliverr.
Another strike on Amazon.
Merchants are becoming more reliant on ultra-fast delivery and order management as more firms, such as Amazon, provide them, particularly in the aftermath of the pandemic, which continues to influence practically every facet of the supply chain and as more stores switch to the online channel.
Automation is seen by vendors as a way to effectively digitize their company. In fact, according to a PwC survey from 2021, 41% of consumers are willing to pay more for shipping if it includes same-day delivery, while only 20% are willing to forgive retailers for delivery delays due to supply chain issues, highlighting the pressure on retailers to deliver quickly and efficiently.
In the face of tough competition from Amazon, Shopify ensures that it goes one step further by purchasing from Deliverr. Amazon recently announced that its Buy with Prime service would be accessible so that certain merchants could provide Amazon’s fulfillment service on their own websites.
Since the last mile is an element that may determine whether a customer purchases on Amazon or via Shopify, Shopify has concentrated on enhancing its last-mile strategy and complementing the resources available to its merchants.
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Shopify has bought Deliverr for 2,000 million euros. This is a move that will help Shopify grow its business and improve the shopping experience for their customers. The stock price of Shopify has also increased since this announcement. Reference: shopify stock price.
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