On-demand shipping startup Shyp has announced it is closing down, effective immediately.
CEO Kevin Gibbon announced that the company would be shutting down in a blog post, titled “I Can’t Wait for You to See What We Do Next.”
“In 2014, we launched Shyp to make shipping items anywhere around the world as easy as two taps on a smartphone,” he wrote. “Almost immediately, it was clear the idea resonated. We couldn’t keep up with the growth. Customers were pouring in and shipments were pouring out. Our service took everything people disliked about shipping – from finding a box to waiting in line at the post office – and eliminated it.”
Shyp aimed to take the guesswork out of package weighing and to take shipping cost calculations away from the consumer, as well as to find the most fiscally prudent way to ship items for its users. By 2015, the company was valued at $250 million and was being compared to other successful startups, such as Uber.
However, according to TechCrunch, Shyp struggled beyond its launching point in San Francisco, and missed targets for expanding to cities beyond its core base.
Gibbon noted that about two years ago, Shyp shifted its focus to small businesses, but “we decided to keep the popular-but-unprofitable parts of our business running, with small teams of their own behind them. This was a mistake – my mistake. While large, established companies have the financial freedom to explore new product categories for the sake of exploring, for startups it can be irresponsible.”
Shyp eventually partnered with eBay in a first-of-its-kind integration, which led to online sellers and similar small businesses accounting for more than half of the startup’s revenue.
“We made major movement on unit profitability and increased revenue per transaction by 150 percent. But it wasn’t enough,” wrote Gibbon.
In July, Shyp reduced its headcount and shut down all operations beyond San Francisco. And while Gibbon explained that the business did a 180 – generating real revenue and effectively breaking even from a bottom line standpoint – the company ultimately couldn’t keep going.
“My early mistakes in Shyp’s business ended up being prohibitive to our survival,” Gibbon wrote. “For that, I am sorry.”