ShipBob Raises $4M For Faster SMB Shipping

ShipBob, a Chicago-based startup that offers the equivalent of Amazon Prime’s shipping service, has raised $4 million in Series A funding to help small businesses ship faster.

The startup’s business model provides an end-to-end shipping platform that covers running inventory, picking up products from warehouses, packing them and then shipping them out. It exclusively targets SMBs that are often reliant on standard shipping options, such as FedEx, UPS and USPS, which can prove to be a relatively costly affair.

The two-year-old platform also fits the needs of companies looking to sell on online marketplaces, like eBay and Etsy, or that have their own eCommerce platform built through webstore softwares, like Shopify and Woocommerce, said ShipBob Cofounder Divey Gulati in an interview with TechCrunch.

In certain cities, ShipBob can also facilitate inventory pickup from stores or other businesses.

According to Gulati, eCommerce companies save between 20 and 25 percent by using ShipBob’s service, which also includes sourcing packaging material and helping customers design it. For its service, the company charges a small subscription fee, in addition to the cost of discount postage rates.

Now, with the funding under its belt, ShipBob is expected to expand on its team and warehouse infrastructure, said Ira Weiss, founder of Hyde Park Venture Partners, who led the investment round. The startup is expected to expand to five other U.S. cities by 2017, TechCrunch reported.

“ECommerce sales currently represent only 8 percent of total retail sales but is growing at 15 percent a year, while brick-and-mortar retail sales growth is limping along … The company is projecting 500 percent growth with this round of funding, and we believe those are realistic estimates,” Gulati added.

Part of its current growth is being fueled by demand on crowdfunding platforms, like Indiegogo and Kickstarter, where startups are looking for a means to fulfill order requests from their backers.