For $2.1 billion in cash and equity, Shopify will purchase Deliverr, a San Francisco-based e-commerce fulfillment business. The deal, first reported by Bloomberg in April, is Shopify’s largest-ever acquisition, according to founder and CEO Tobi Lütke.
“Our goal is to not just level the playing field for independent enterprises, but to tilt it in their favour,” Lütke wrote in announcing the acquisition. “With Deliverr, SFN will provide millions of expanding businesses with a simple, powerful logistics platform that will keep their consumers happy.”
Shopify said Deliverr will cooperate with its Shopify Fulfillment Network (SFN) to improve merchant inventory management. On top of two-day and next-day delivery choices, Shop Promise offers extended options for storage, freight, inventory preparation and returns.
We can now construct an end-to-end logistics platform together,” Deliverr co-founder and CEO Harish Abbott said in a statement. “Our team has helped businesses of all sizes optimise their operations and has built the future of merchant-first fulfilment solutions. We’re pleased to join Shopify in their aim to democratise shipping and fulfilment for small businesses.”
Prior to the Shopify acquisition, Deliverr had financed $490.9 million from former Symphony Commerce colleagues Abbott and Michael Krakaris. The company was valued at $2 billion post-money in the $240 million Series F led by Tiger Global.
Deliverr, which rents warehouse space and hires warehouse fulfilment departments to pick and pack e-commerce orders, predicts product demand based on geography and other characteristics. So, it may “pre-position” things near high demand locations, stocking items across its network of warehouses and sort centres, and selecting the best shipping way to customers.
Shopify said it will pay roughly 80% in cash ($1.68 billion) and 20% in Shopify Class A shares ($420 million). Many computer behemoths have Class A shares with one vote per share and Class B shares with multiple votes per share.
Is Deliverr a good fit for M&A? Alex Wilhelm, TechCrunch’s transaction expert, disagrees. He reminded me that the startup market value cycle peaked in November, indicating Deliverr raised at or near a peak in early 2022. On the other hand, the deal may squeeze early investors if the company’s last round included guarantees that final investors would receive a minimum return.