Sendcloud Raises $177M Led by SoftBank to Expand SaaS Shipping

The Rise of E-commerce and the Need for Efficient Shipping Solutions

The last eighteen months have witnessed substantial expansion within the e-commerce sector, driven by consumers increasingly utilizing online platforms and applications for purchases, both essential and non-essential. This shift has also spurred demand for delivery services, as individuals opt for home delivery over in-store shopping.

Sendcloud Secures $177 Million in Funding

Sendcloud, a Dutch startup specializing in streamlining shipping processes for retailers, has recently announced a $177 million funding round. This significant investment underscores both the company’s growth trajectory and the broader market need for alternatives to Amazon fulfillment or complex direct carrier arrangements.

Providing Logistics Capabilities to All Merchants

According to Rob van den Heuvel, CEO and co-founder of Sendcloud, the company aims to deliver logistics capabilities comparable to Amazon for other merchants. Prior to recent lockdowns, Sendcloud experienced annual growth rates between 70% and 80%.

During lockdown periods, this growth accelerated to 120%, accompanied by a 133% surge in parcel volumes. Van den Heuvel noted that these elevated volumes have remained consistent.

Investment Details and Valuation

Softbank Vision Fund 2 spearheaded this Series C funding round, with participation from L Catterton and HPE Growth. This represents the largest investment Sendcloud has received since its founding in 2012, having previously raised just over $23 million.

While the startup has not publicly disclosed its valuation, sources indicate an approximate value of $750 million.

Comparing Sendcloud to Competitors

For comparison, Shippo, a U.S.-based competitor with a larger customer base of 100,000, secured funding in June at a $1 billion valuation. However, Shippo has also raised a greater total amount of capital, influencing its valuation. Sources highlight Sendcloud’s strong capital efficiency in achieving its growth.

Addressing a Clear Market Gap

Sendcloud, alongside companies like Shippo and Stamps.com, addresses a distinct gap in the market. As e-commerce matures, customers expect increasingly sophisticated service levels for their deliveries, regardless of whether they shop online or in physical stores.

Smaller retailers often lack the infrastructure to efficiently manage these delivery expectations. The smallest businesses may rely on manual post office visits, while larger ones may negotiate directly with carriers, facing scalability and cost challenges.

Amazon as the Industry Benchmark

Amazon has established a high standard for shipping and delivery, setting customer expectations for speed and convenience through its Prime membership program. The company’s extensive network and increasing control over its logistics operations provide a benchmark for the industry.

Furthermore, Amazon offers shipping services, warehousing, and other fulfillment options through its Fulfillment By Amazon (FBA) program.

Sendcloud’s Role as an Aggregator and Integrator

Sendcloud functions as an aggregator and integrator, connecting retailers with a diverse range of e-commerce technology providers – including Shopify, Magento, WooCommerce, and Amazon – and shipping carriers like DHL, UPS, FedEx, and DPD (currently over 35 and expanding).

This integration streamlines the process for retailers, allowing them to easily select and utilize services that meet their specific needs, automating the shipping process and eliminating manual effort.

Pricing Structure

Sendcloud offers its tools through tiered pricing plans, starting with a free “essentials” tier for small users. Additional tiers are available at €40, €89, and €179 per month, depending on business size.

The Expanding Delivery Market

Sendcloud operates within a broader trend of cloud-based platforms digitizing previously fragmented services in the physical e-commerce space, such as freight forwarding and warehousing. The delivery market is projected to grow from $475 billion currently to $591 billion by 2024, presenting a substantial opportunity.

While consumers may not directly encounter the organizational complexities of shipping, the increasing reliance on e-commerce necessitates efficient and reliable delivery solutions.

Investor Perspectives

“Growing parcel volume and demand for flexible delivery have increased the need for smart shipping solutions amongst online merchants,” stated Yanni Pipilis, managing partner at SoftBank Investment Advisers. “Sendcloud has built a leading all-in-one shipping platform that aims to help merchants easily integrate functionalities such as checkout, shipping, tracking, returns, and analytics. We are pleased to partner with Rob and the Sendcloud team to support their mission of fueling the next wave of e-commerce enablement.”

Christopher North, managing partner at L Catterton, added, “Sendcloud’s scalable, intuitive, and highly localized platform is at the forefront of enabling sophisticated shipping for online merchants across Europe. We are excited to partner with the exceptional Sendcloud team to leverage our consumer-focused e-commerce experience and deep expertise working with high-growth technology and software businesses to drive continued innovation and position the Company for growth globally.”

Board Appointments

Neil Cunha-Gomes and Monika Wilk from SoftBank Investment Advisers, along with Ido Krakowsky from L Catterton, will be joining Sendcloud’s board of directors.