E-commerce sales increased by 44% during the epidemic, setting a new record for the industry. Delivery, a logistics and fulfillment startup that expedites shipment without costing customers more, has gotten a piece of the action while industry giants like Amazon and Walmart have dominated due to their size and same-day shipping options.
Delivery cofounder Michael Krakaris, who was included in 2019 mycnnews30 Under 30 Retail & Ecommerce list, describes it as “simply this tremendous tsunami for eCommerce—what that’s Covid started.” And we’re among the firms most placed to achieve that.
Delivery said on Wednesday that it has secured a $170 million Series D round of investment, headed by Coatue, with support from Brookfield Technology Partners, Activant Capital, 8VC, and GLP. This brought the company’s total capital to $240 million.
Krakaris, 26, and Harish Abbott established Delivery in 2017 to streamline the challenging process of completing online purchases. Instead of shipping directly to customers from a single corporate site, it rents and stocks items from firm clients—such as TikTokers Josh Richards and Bryce Hall’s Ani Energy and the specialized pillow company Huggaroo—in 52 warehouses spread over 17 states in the U.S. Customers of businesses that work with Deliverr often receive delivery within 48 hours. That turnaround time may be completed in less than 24 hours in large cities like New York and Los Angeles (subject, of course, to inventory, weather, and other variables).
Delivery offers speedy shipping at no additional cost, unlike Amazon and eBay. It generates revenue by charging companies to store and distribute their products from the warehouse space that Deliverr has hired; the cost for a single phone cover starts at $0.05. Millions of orders have been delivered by Deliverr’s 150-person workforce for more than 5,000 businesses, around 3,000 of which signed up as clients last year. Additionally, according to Krakaris, income has surged by 600% in the last year.
Delivery works with clients selling through platforms including Walmart Marketplace, Amazon’s Fulfilled by Merchant program, through which orders are not eligible for W+ and Prime, as well as Shopify, even though the majority of their business is direct-to-consumer fulfillment. Delivery raised sales from two-day shipping by 44% and from next-day delivery by 75% for small companies who sell through the latter, demonstrating a return on investment for companies like Hey Dude Shoes that want to turn internet surfers into consumers. Delivery is a self-service platform that charges flat prices for bulk storage and delivery as opposed to rivals like Google, Wish, and eBay which charge per item dispatched, which allows them to keep costs to clients low.
Companies like Brookfield, America’s second-largest mall operator with a market valuation of over $63 billion and a shareholder in Deliverr, have been exploring for ways to outfit retail buildings with eCommerce capabilities as the epidemic has forced the industry to confront a new, digital frontier. For instance, Brookfield thinks the vacant stores at its malls may be Deliverr warehouses. Additionally, because 60% of Americans live within a 30-minute drive of a Brookfield mall, these establishments may provide customers with a hybrid retail-eCommerce experience with Delivery.
Josh Raffaelli, the managing partner at Brookfield Technology Partners and contributor of a $35 million convertible note, describes Deliverer as “Amazon Prime for everyone else.” “It’s about giving merchants control over the speed of delivery, which is the most crucial factor in sales.”
To increase next- and two-day shipments to more of America, Krakaris agrees and intends to quadruple Deliverr’s staff using the newly discovered funds. Delivery has the potential to dominate a market worth more than $100 billion, according to Alex Kolicich, founding partner at 8VC, who not only contributed to the company’s Series D investment but also gave the cofounders their first check-in 2017.
Kolich, whose portfolio includes Wish, Flexport, Asana, and Branch, calls it “one of the fastest growing B2B startups we’ve ever seen.” “Everyone has utilized Prime to make online purchases. When you explain to them that Deliverr is developing the necessary infrastructure to provide all e-commerce a Prime-like experience, [the investment] becomes obvious.