Deliverr Secures $170 Million to Expand Rapid E-commerce Fulfillment

With the significant growth in e-commerce, accelerated by recent global events, businesses enabling swift delivery – within one or two days – are experiencing high demand. Deliverr is a startup positioned to meet this need, and has recently announced a $170 million funding round.

Investment Details

This financing includes a $135 million Series D round, spearheaded by Coatue. An additional $35 million is provided through a convertible note led by Brookfield Technology Partners. Activant Capital, 8VC, and GLP, existing investors, participated in both investment phases. The company has rapidly progressed through funding stages, securing $240 million in under four years.

Capital Intensive Growth

Deliverr’s co-founder and CEO, Michael Krakaris, emphasizes the company’s rapid expansion but also highlights the substantial capital requirements of the business. He stated that achieving scale is crucial for building a highly defensible model in a competitive, winner-take-all market.

How Deliverr Operates

Deliverr utilizes software to strategically position goods within a network of warehouses across the country. These warehouses then handle the picking and packing of orders. The software subsequently identifies the most efficient and cost-effective delivery method, ensuring a two-day delivery guarantee to customers. Furthermore, the company is actively developing a next-day delivery service to broaden its offerings.

Warehouse Partnerships

Deliverr does not own warehouse facilities; instead, it leases space. A key challenge lies in establishing and maintaining strong relationships with these warehouses, and the nature of these arrangements continues to evolve alongside the company’s growth. Initially aiming for 5-10% of a warehouse’s business, Deliverr now serves as the sole fulfillment partner for some locations.

Navigating Pandemic Challenges

The pandemic presented significant hurdles for the company. Establishing new warehouse partnerships often required extensive travel due to quarantine restrictions. Supply chain disruptions and temporary warehouse closures necessitated agile business adjustments. However, this constant adaptation fostered a valuable ability to quickly reallocate resources.

Team Expansion

Deliverr began 2020 with a team of 50 and has since grown to 150 employees. Plans are in place to double the workforce this year, contingent on business performance. Krakaris notes the unique challenge of onboarding new hires remotely, having never met a majority of his team in person.

He is actively working to foster connections through virtual events and open communication, acknowledging the limitations of remote interactions.

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