Shopify Buys Inventory Management Startup Deliverr for $2.1B

The e-commerce platform Shopify is acquiring the fulfillment and inventory management startup Deliverr in a $2.1B deal that will create an end-to-end logistics network that combines Shopify’s self-operated warehouse hubs with Deliverr’s third-party distribution partners.

Ottawa, Canada-based Shopify said the acquisition will increase access to next-day and two-day delivery services for merchants who store inventory and fulfill orders on the Shopify Fulfillment Network (SFN).

“Our goal is to not only level the playing field for independent businesses, but to tilt it in their favor—turning their size and agility into their superpower, Shopify CEO Toby Lutke said, in a blog post.

“Together with Deliverr, SFN will give millions of growing businesses access to a simple, powerful logistics platform,” he added.

Deliverr, a startup based in San Francisco, ships more than 1 million orders per month in the US. The firm’s AI-oriented inventory management software and network of third-party warehouses, carriers and last-mile partners now will combine with Shopify’s large warehouse hubs in an end-to-end system.

Using predictive analytics and machine learning, Deliverr says its software anticipates the demand for products based on geography, among other variables. The platform then uses this analysis to “pre-position” inventory in its network of leased warehouses, relying on third-party logistics partners to pick, pack and deliver e-commerce orders.

Deliverr’s technology will power Shop Promise, a new Shopify service that will provide its customers with two-day and next-day delivery as well as expanded options for storage, freight, inventory preparation and returns.

“Our technology and expertise in inventory management, inventory placement and demand chain combine perfectly with Shopify’s roadmap,” Harish Abbott, Deliverr co-founder and CEO, said in a statement.

Offering a contrast with industry giant Amazon, Abbott said the combined platform would “democratize” fulfillment for entrepreneurs.

“Shopify has been building the future of merchant-first fulfillment solutions, and our team has a track record of helping businesses of all sizes streamline their operations,” he said. “We’re excited to join Shopify in their mission to make commerce better for everyone while democratizing shipping and fulfillment for independent entrepreneurs.”

Shopify’s acquisition of Deliverr follows the Canadian company’s $450M purchase of 6 River Systems, a developer of cloud-based software and mobile robots specifically designed for fulfillment and distribution.

Deliverr was launched in 2017 and has raised an estimated $491M in capital. Under the acquisition agreement, Shopify said it will pay about 80% of the purchase price in cash and the remainder in Shopify Class A shares.