ShipBob Secures $68M Series D from SoftBank Vision Fund

Sep28, 2020

The rush to online shopping is drawing fresh investor attention as the coronavirus pandemic supercharges digital demand.

E-commerce logistics and technology provider ShipBob Inc. raised $68 million to expand its fulfillment network and add business-to-business service shipping palletized goods to retailer distribution centers and stores, the company said Monday.

The Series D funding round, led by SoftBank Group Corp.’s Vision Fund 2, comes as backers are investing millions in ventures aimed at helping businesses handle soaring online orders.

Online U.S. retail sales surged to $200.7 billion in the second quarter, up 44.4% from the same period in 2019, according to the Commerce Department. Retailers and logistics providers are ramping up hiring, with plans to bring on hundreds of thousands of workers to help process, package and ship online orders during the holiday peak.

“In March we saw a significant acceleration of e-commerce shipping volume, going through the roof,” ShipBob Chief Executive and Co-founder Dhruv Saxena said in an interview. The company has “been doing peak volumes, Black Friday-type volumes” since the second quarter, he said, as homebound shoppers loaded up on household goods, consumer electronics and beauty and personal-care products.

Total e-commerce revenues for U.S. logistics providers are estimated to reach $53.3 billion this year, up 22.8% from 2019, as a result of the pandemic and as companies continue to outsource online fulfillment operations, according to research firm Armstrong & Associates Inc.

Those figures include revenue from Amazon.com Inc.’s third-party logistics operations, which Armstrong estimates at $31.8 billion. An Amazon spokeswoman declined to comment.

Venture-capital and private-equity investors are focusing on “e-commerce providers and last-mile delivery providers, as those segments are among the fastest-growing part of third-party logistics,” said Armstrong & Associates President Evan Armstrong.

Logistics technology companies are also drawing new funding. Supply-chain robotics startup Attabotics Inc. raised $50 million last month and e-commerce produce delivery platform Misfits Market brought in $85 million in funding in July. Shares of e-commerce software provider Shopify Inc. have tripled in value since March.

Founded in 2014, ShipBob has about 570 employees in the U.S. and abroad and has raised $130.5 million in funding to date. The company owns and operates four U.S. fulfillment facilities. It has also added service since April at six centers, including sites in Canada and Ireland, that are operated through partnerships with logistics providers that use its software to serve ShipBob’s customers.

The company expects to generate well north of $100 million this year, Mr. Saxena said, and has positive cash flow. “We are almost break-even as a business,” he said.

ShipBob and other logistics providers are ramping up hiring ahead of expected heavy online demand during the holiday season. E-commerce logistics company Radial plans to bring on 25,000 seasonal workers this year, up 19% from 2019, the company said last week.

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