With a massive surge in growth of e-commerce last year and also big fishes of the pond like Amazon getting bigger during the covid-19 pandemic, that rising tide also lifted a lot of smaller boats. And that, in turn, has had a big impact on the wider e-commerce ecosystem. We witness the latest development, ShipBob which has established an operation and tech platform that presently works with some 5,000 e-commerce businesses to run shipping and logistics like their bigger rivals, has raised $200 million. ShipBob is already profitable, but it will be using this money to double down on newer areas of business: both in terms of expanding geographically, and technically, with more R&D around software, robotics, and autonomous systems.
Dhruv Saxena, the company’s CEO asserted in an interview that they consistently evaluate the needs of the merchants today, where they believe their needs will evolve in the future, and prioritize what can drive the most impact to help make them successful and differentiate from their competitors.
The Chicago-based company has confirmed that it is raising its valuation to over $1 billion, doubling its valuation compared to its last round, a Series D that it closed in September 2020. Bain Capital Ventures is leading this Series E round, with SoftBank, Menlo Ventures, Hyde Park Venture Partners, Hyde Park Angels, and Silicon Valley Bank also participating. Several of these are repeat investors in the company.
On the infrastructure front, the company operates warehouses across around 20 locations in the U.S., Canada, Europe, and Australia (with plans to use some of this hefty round to expand that list to 10 more centers), from which its customers can store and distribute the goods that they are selling online.
This platform also offers a merchant application to its customers to enable them to track that inventory and also to help them liaise with the warehouses to select items to pick and send to fill orders.
In addition, it collaborates with a number of shipping companies to then actually send out those orders to customers. All together it says it integrates with some 40 partners, ranging from the likes of Walmart (to power two-day delivery) and Pachama (to carbon off-set deliveries), plus Amazon, Walmart, Shopify, BigCommerce, Wix, Square, and Squarespace so that people setting up sites or selling through those platforms can use ShipBob to handle the orders once a customer has clicked on “buy.”
Companies like ShipBob — and it is not the only one in this space, with others including Amazon, ShipHero, Byrd, OceanX, Shippo, and many more — have essentially built a logistics operation that lets those companies outsource the work of doing that themselves, much as they would use a payments provider like Stripe rather than building a payments flow from the ground up. ShipBob also, by virtue of working with many businesses, creates that economy of scale by bringing their orders and work altogether, mimicking essentially what Amazon does for itself. Moreover, “Many consumers who were forced to adapt to online buying are continuing to buy things online. It’s for this reason and the fact that ShipBob is profitable, that investors are happy to make a bullish investment now.