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AI

Deliverr raises $250M to grow its ecommerce fulfillment network

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While ecommerce sales are on the rise — with revenue projected to increase from $2.3 billion in 2018 to $4.5 billion by the end of 2021 — fulfillment remains a challenge as the pandemic snarls the supply chain. As early as July, a U.S. Census Bureau survey f0und that 38.8% of U.S. small businesses were experiencing domestic supplier delays. Shoppers tend not be very understanding of of disruptions, unfortunately, with 38% saying that they’ll abandon their order if the delivery is estimated to take longer than a week.

Against this backdrop, Deliverr, an ecommerce fulfillment startup headquartered in San Francisco, today announced that it raised $250 million in series E funding, bringing its total raised to over $500 million. The round, which was led by Tiger Global with participation from 8VC, Activant, GLP, Brookfield Technology Partners, and Coatue, values Deliverr at $2 billion post-money.

CEO Harish Abbott says that the proceeds will be put toward growing Deliverr’s shipping network, supporting product development, and expanding headcount.

“The most effective way to address supply chain congestion is to move inventory closer to the end customer. Deliverr is the only company working to solve this problem through stronger inventory placement, while leveraging cutting-edge machine learning and optimization technology to build a smarter fulfillment network,” Abbott said in a press release. “With this new capital, Deliverr will focus on scaling next-day fulfillment for ecommerce merchants and grow our world-class team of engineers, data scientists, and operations experts.”

AI-powered fulfillment

Deliverr was cofounded by former Symphony Commerce colleagues Abbott and Michael Krakaris in 2017. Prior to Symphony, Krakaris spend time working with product marketing teams at Twilio. Abbot was the chief product officer at Lulu.com and a senior program manager at Amazon.

Using predictive analytics and machine learning, Deliverr anticipates the demand for products based on demographics, geography, and other variables. The platform then uses the analysis to “pre-position” items close to areas of demand, stocking items across a network of over 80 warehouses, cross-docks, and sort centers.

Deliverr

Deliverr rents out — rather than purchases — warehouse space, using warehouses’ fulfillment departments to pick and pack ecommerce orders. The company’s software determines which products to send to which warehouses and then finds the best delivery method to ship to customers, with either two-day or next-day delivery guarantees.

Deliverr’s platform integrates with retailers’ listing tools and allows managers to explore cost previews for each SKU in their catalog. It also syncs with sales channels so that orders flow in automatically.

Growth market

One in three companies claim to have incorporated AI capabilities like those offered by Deliverr into their supply chain management processes and one in four is working toward that goal, a study from Symphony RetailAI found. A separate report suggests that within the next two years, retailers plan to upgrade their predictive inventory planning, predictive labor planning, and robotic systems for picking and material handling.

Deliverr is a beneficiary of the tech boom. The company’s network — which Deliverr claims is within 100 miles of half of the U.S. population — is on track to power a more than $2.5 billion gross merchandise volume (GMV) run rate by the end of 2021. (For retailers, GMV refers to the average sale price per item charged to a customer multiplied by the number of items sold.) Current customers include large retailers on marketplaces from Shopify, Walmart, Amazon, eBay, and Target.

The explosive growth of online sales is expected to drive the ecommerce fulfillment services market to $86.44 billion in value this year, according to Grand View Research. Deliverr competes with on-demand logistics and fulfillment startup Flowspace, Bringg, ShipBob, Bond, and Shippo, among others.

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Categories
AI

Walmart is expanding its robot-powered fulfillment centers to ‘dozens of locations’

Walmart is planning to increase the number of local fulfillment centers across the United States, it announced on Wednesday. Walmart’s approach of more localized fulfillment centers is a direct parallel to Amazon’s strategy, as both companies continue to face off amid an increasing demand for online orders. The new fulfillment centers are warehouses that will either be built within or adjacent to its existing retail locations.

Walmart’s first fulfillment center opened in 2019 in Salem, New Hampshire, when the retail giant started piloting the concept. These warehouses use wheeled robots — called Alphabots — to pick items from the shelves and prepare orders placed online.

Alphabots will retrieve items ordered online such as boxed or frozen items. However, the company said that its human employees would still be tasked with grabbing fresh items like meat and produce in addition to larger items.

Some Walmart stores will add automated pickup points for seamless curbside pickup.
GIF: Walmart

Walmart is piloting new technologies for some of its fulfillment centers, such as an automated curbside pickup feature, which will allow buyers or delivery drivers to drive up to a specific location, scan a code, grab their order, and go, all without leaving their vehicles.

Walmart hasn’t said which locations will receive fulfillment center add-ons, but the company announced in its blog post that it’s already planning “dozens of locations, with many more to come.”

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Categories
AI

On-demand logistics and fulfillment startup Flowspace raises $31M

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On-demand warehousing fulfillment startup Flowspace today announced that it raised $31 million in a series B equity funding round. Los Angeles, California-based Flowspace says that the round, which was led by BuildGroup, will enable it to expand its network of fulfillment centers to build on pandemic-driven growth. The company says that the number of orders shipped on its platform increased 10 times during the past year.

The demand for warehousing fulfillment is on the rise. Prior to the COVID-19 crisis, about 35% of industrial leasing activity was related to ecommerce, according to a report from JJL. But as early as July, as much as 50% of that leasing activity was tied to the online retail industry. JJL anticipates that as a result, the need for industrial real estate could reach an additional 1 billion square feet by 2025.

Founded in 2017, Flowspace offers fulfillment and distribution services, warehouses, and a team of workers that help pick, pack, and ship products. Customers can track inbound and outbound shipments to and from warehouses and access a network intelligence tool for real-time insights and logistics recommendations. Companies get an overview of all the items in their Flowspace warehouses. And they can see inventory, orders, and things that require action.

According to cofounder and CEO Ben Eachus, Flowspace taps AI and machine learning to deliver predictive insights that allow retailers and ecommerce companies to anticipate market demands and stock inventory in those locations.

From the time an order is placed on a website to the time it arrives at someone’s door, it is tracked in our software. “Our software is already running in hundreds of warehouse facilities that are using Flowspace to enable e-commerce fulfillment,” he said. “This means that with a single integration point, brands can store and ship their products from multiple locations, so they can offer faster and cheaper delivery to their customers. This process historically takes weeks or months; with Flowspace, they can do this in days.”

Flowspace

While only 12% of manufacturing, transportation, and other industrial organizations recently surveyed by Deloitte said that they’re using AI in their operations, companies reliant on logistics stand to benefit from it. A McKinsey report found that the majority of enterprises saw cost reduction in supply chain planning costs after implementing AI. To this point, plant-based foods startup Nuggs says it notched a 460% increase in monthly orders after adopting Flowspace’s solution.

“It’s widely reported that the pandemic has accelerated the growth of e-commerce. For every $100 spent online, companies are spending $20 of that to store and ship these products to customer’s homes. We support brands selling online and helping them get products to their customers more efficiently,” Eachus continued. “We are building the most scalable and capital efficient fulfillment platform in the industry. This won’t happen overnight, but in a few years, when you order something online, those products will have moved through the Flowspace platform.”

With the series B, 80-person Flowspace has raised a total of $46 million to date. Previous investments came from Canvas Ventures, Industrious Ventures, Moment Ventures, 1984 Ventures, eGateway Capital, and Y Combinator.

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