Deliverr Lands $40M In Funding To Battle Amazon

How does a company compete with Amazon? At Deliverr, they attack what Amazon won’t handle – and now they have the funding to prove it. Yesterday, the smaller-scale fulfillment company closed $40 million in Series C funding, led by Activant Capital, bringing its total capital raised to $70 million.

Given that today’s consumers have come to expect that orders will be fulfilled overnight or within two days at the most, Deliverr aims to capitalize on that expectation by bringing that service to non-Amazon customers, who make up an estimated $250 billion industry in the U.S. alone.

In the age of Amazon, achieving success in this market takes dozens of fulfillment centers, advanced logistics and sophisticated enterprise technology. The $40 million infusion will allow Deliverr to apply machine learning capabilities to predict demand and inventory, attract new clients and scale its team in San Francisco, Chicago and Toronto.

“We now live in a world where consumers expect their online purchases to arrive at their doorstep almost instantaneously. While massive businesses like Amazon have the scale and expertise to make this a reality, the vast majority of online retailers simply can’t meet this expectation on their own. That’s where Deliverr comes in,” said Steve Sarracino, founding partner of Activant Capital, in a statement. “Retailers selling their products on Walmart, eBay and their own Shopify sites set themselves apart with fast shipping by working with Deliverr. This includes new entrepreneurial businesses like TushBaby, large CPG brands like Bulletproof 360 and top Walmart sellers like Enviro-Log.”

While it doesn’t divulge specific sales numbers, Deliverr does report “11x growth” in customers over the past year, as says it works with thousands of merchants. It also increased its warehouse footprint by four times, with half of the U.S. population now within 100 miles of one of its warehouses.

The company presented several use cases in which smaller retailers have risked a two-day shipping guarantee and come away with increased sales and spikes in customer satisfaction. For example, kitchen and home goods e-retailer Equinox International switched on its two-day capacity with Deliverr through the Walmart online marketplace. According to the company, it was seeing three-figure daily sales before working with Deliverr. Within a month of activation, sales reached four figures per day, which Equinox says is a 900 percent spike.

According to DateX, 38 percent of customers abandon their orders if delivery is expected to take longer than a week. Sixty-nine percent would abandon a retailer altogether if a purchase was not delivered within two days of the promised date.

Deliverr is not the only company looking to break into the eCommerce fulfillment space. Bringg, which operates in 50 countries, is even more ambitious, looking to break the same-day barrier. The firm raised $25 million early last year, adding Next47, the Siemens-backed global venture firm, to its list of well-known investors, including Salesforce Ventures, Aleph VC, O.G. Tech Ventures (Eyal Ofer’s VC arm), Cambridge Capital, Coca-Cola, Ituran and Pereg Ventures. It also services Walmart, Panera Bread and Arcos Dorados (the largest global franchisee of McDonald’s).

“The commoditization of same-day and next-day delivery is not too far from any brand’s reach,” says Bringg CEO Guy Bloch. “Market trends will eventually propel brands to aggregate billions of deliveries to be fulfilled by a network of technology and logistics providers and partners to deliver at scale – in essence, commoditizing the delivery experience. And this is basic market equilibrium … I call it the Coalition model: It’s all of us – brands, logistics companies and technology vendors – coming together to create a real alternative to Amazon, creating a fair game again.”

Creating a coalition might be a little too ambitious in a market where the competition for venture capital is intense. However, Amazon has been served on the fulfillment side of its business – and the same-day game is on.