M&A
May 7, 2022
4 minutes read

Deal: Shopify To Buy E-Commerce Logistics Startup Deliverr For $2.1B

Shopify, the Canadian e-commerce tech giant, is making its biggest acquisition ever. The company has sealed a deal to buy…

Shopify, the Canadian e-commerce tech giant, is making its biggest acquisition ever. The company has sealed a deal to buy Deliverr, a logistics provider for online merchants. Shopify will pay $2.1bn for the company, about $1.7bn in cash and the rest with shares.

Deliverr provides fulfillment services to small online merchants in the race to keep up with delivery times against major players like Amazon. The company rents space in many warehouses across the US, where it stores customers’ goods and ships them out when required.

Think of Deliverr as a large warehousing and shipping network for online merchants that may not be able to afford dedicated fulfillment services otherwise. A lot of these merchants sell through Shopify, so it makes sense that it’s the company acquiring Deliverr.

Deliverr also serves third-party sellers on other platforms competing with Shopify, including Amazon, Walmart, Etsy, and eBay. The five-year-old startup claims to ship over a million orders a month for its customers.

Shopify already offers a similar service to Deliverr for its merchants. Therefore, buying the company is a strategy to step up its fulfillment game. Indeed, the company says buying Deliverr will more than double the size of its fulfillment team.

In 2019, the Canadian e-commerce giant launched the Shopify Fulfillment Network to handle logistics for merchants selling on its platform. In that same year, it acquired 6 River Systems, a startup developing robots for warehousing operations. Deliverr will merge with these two operations to form a broader logistics unit serving independent merchants, led by Shopify executive Aaron Brown.

$2.1bn represents a nice exit for Deliverr, which raised $490mn from VCs and was valued at $2bn from its most recent funding round. Investors in the company include big names like Coatue, 8VC, and Tiger Global.

Alongside the acquisition, Shopify also announced financial results for the quarter ended March 31, 2022. The company reported $1.2bn in revenue, up 22% year-over-year, and a net loss of $1.5bn, mostly due to writedowns on equity investments.

Shopify is a strategic investor in several fintech/e-commerce companies, including Affirm, the buy-now-pay-later provider, and Global-E, an Israeli e-commerce software provider. Recently, these two stocks have taken a beating (alongside the broader tech markets), leading to Shopify’s significant on-paper losses.