Shopify Inc. announced late Thursday that it would acquire shipping firm Deliverr for $2.10 billion in cash and stock. The deal is the largest acquisition in the company’s history, enabling an end-to-end logistics platform for millions of merchants.
The Canadian e-commerce company anticipated the completion of the agreement to be a huge benefit to its sellers. The addition will help them reduce costs and eliminate the hassle of managing complex supply chains.
Specifically, it will combine Deliverr with Shopify Fulfillment Network (SFN) to strengthen its merchant inventory management capabilities.
Consequently, the deal will power Shop Promise, a new service that will provide customers with two-day and next-day delivery. This move will offer expanded options for storage, freight, inventory preparation, and returns.
The San Francisco-based fulfillment tech startup provides services for Amazon and other marketplaces. It also facilitated sales made through social platforms like TikTok and Instagram.
In addition, it ships over a million orders per month for thousands of merchants in the United States.
Before the purchase, Deliverr had raised $490.9 million in the capital. Then, financial experts valued the company at $2.00 billion post-money.
Under the accord, Shopify will pay about 80.00% of the purchase price in cash, valued at $1.68 billion. Then, another 20.00% or $420.00 million in the firm’s Class A shares.
The agreement follows close on the heels of the business’ $450.00 million acquisition of 6 River Systems. The tech company developed cloud-based software and mobile robots for shipping and fulfillment.
In line with this, the inclusion of Deliverr will form a broader logistics unit within Shopify. Subsequently, fast shipping has become increasingly desirable for merchants as the pandemic affected every aspect of the supply chain.
Shopify follows Amazon, eBay slump
Shopify is the latest e-commerce platform to take the post-pandemic hit, following a gloomy report by Amazon, eBay, and Etsy.
The company reported underwhelming earnings of $0.20 per share, lower than the average expectation of $0.63 per share.
Then, its revenue edged up 22.00% year over year to $1.20 billion. However, the result still declined from analysts’ consensus of $1.24 billion.
Moreover, Shopify anticipated revenue growth to be lower in the first half of the year, as it navigates tough comparisons.
The e-commerce sector currently contends with rising concerns about sustaining the high-flying growth during the coronavirus pandemic. The companies in the industry also blamed inflation, the war in Ukraine, and changing online consumer habits.