Deliverr: Enabling Fast Online Retail Delivery
June 12, 2020 | Scott Murphy
The trend of direct-to-consumer (D2C) is accelerating at an unprecedented rate as a result of the COVID-19 pandemic. More consumers have opted for virtual carts amid stay-at-home orders, impacting online marketplaces from Etsy to Amazon. This has shifted preferences further away from brick and mortar retailers and simultaneously increased the need for fast, reliable fulfillment services to deliver orders to consumers.
Deliverr, an Alumni Ventures Group portfolio company, has created a tech-enabled, asset-light fulfillment service for any online merchant. The platform allows retailers to offer free, two-day delivery across any channel, whether Walmart, eBay, Amazon, or their own website.
Containing Costs and Maximizing Resources
The key metric to measuring fulfillment success is mileage per unit. The lower the mileage per unit, generally the faster and cheaper that unit can be delivered. Achieving an ideal ratio requires proper data and technology to predict where end-customers will be located, and in turn, what products to store in warehouses. While Amazon is able to collect and leverage this data, smaller merchants typically lack access to the technology needed to optimize fulfillment.
Deliverr is tackling this problem with a data-driven approach. The company’s platform leverages machine learning and predictive intelligence to determine in which of its warehouses to store clients’ goods. Data from all merchants’ previous sales inform Deliverr’s inventory strategy. By knowing where items are most popular, and therefore where they are most likely to be shipped, Deliverr positions products ahead of time so they can travel the shortest distance and arrive faster.
The company further contains costs with an asset-light approach to securing warehouse space. Deliverr found that the average warehouse operates at roughly 55% capacity. By leasing this remaining storage space instead of purchasing warehouse facilities, Deliverr has built a cost-efficient network of storage facilities close to the end-customer while focusing more capital on executing their core competencies.
Experienced Team Navigating Enormous Market Opportunity
Deliverr is expanding their footprint in the global fulfillment market, worth an estimated $80 billion and expected to grow 15% annually. Additionally, Deliverr experienced a significant spike in demand during the first half of 2020 as most U.S.-based consumers observed shelter-in-place orders.
An experienced leadership team is helping the company navigate a lucrative industry and COVID-related market opportunities. CEO Harish Abbott helped build Amazon’s ordering and fulfillment systems before launching and selling a series of startups over the last 15 years. He is joined by a C-suite with extensive industry experience; four of the company’s top executives have worked in fulfillment for over a decade.
Spike Ventures, the Alumni Ventures Group fund for the Stanford community, first discovered Deliverr while researching startups in the shipping and delivery landscape. One of Spike’s Venture Fellows was able to facilitate an introductory call with Abbott, who earned his MBA from Stanford. The conversation and mutual alumni connection helped AVG secure a spot in a $40 million Series C led by Activant Capital, with participation from 8VC and Global Logistics Properties. In addition to Spike Ventures, AVG’s Nassau Street Ventures (for the Princeton community) and Total Access Fund joined the round.