E-commerce has undoubtedly seen a huge rise in the lives of COVID-19 in the last one and a half year, people turned to web and apps to maintain their social distancing and shop for essentials and non-essentials, and use Delivery services done to receive your goods instead of taking things personally.
Today, a Dutch startup called SendCloud has created a service to help retailers with the latter of these – providing a cloud-based way to easily organize and operate shipping services by choosing from a wide range of carrier and other options. Doing — is announcing $177 million in funding, a major investment that speaks not only to SendCloud’s recent growth, but what it does to market demand: to turn to Amazon for fulfillment Provide an efficient and viable alternative, or go through the manual and costly process of sorting shipping directly with the companies that provide it.
“We strive to provide Amazon-level logistics to all other merchants,” Rob van den Heuvel, CEO and co-founder of SendCloud, said in an interview. Pre-lock down, he said the company – which now has 23,000 customers – was seeing an average of 70% to 80% growth every year. With a 133% increase in parcel volume during the lockdown, it went up to 120%, “and we haven’t seen a drop in volumes,” he said.
SoftBank Vision Fund 2 – a prolific investor in multiple segments of the e-commerce ecosystem – is leading the Series C, in which Took Catterton and HPE Growth are also participating. This is Sendcloud’s biggest investment to date: The Eindhoven, Netherlands-based startup has been around since 2012 and has been around $23 million since now ($23 million, 23,000 customers has a nice ring to it.)
Van den Heuvel confirmed that the startup is not disclosing its valuation with this round, although a source very close to the deal tells us it is worth around $750 million.
As a point of reference, Shippo — a US company operating in a similar space but with 23,000 SendCloud customers — raised the money in June at a valuation of $1 billion. However, Shippo has also raised significantly more money and as a result its valuations must have gone up. On the Sendcloud side, our source reported that it has demonstrated a very strong amount of capital efficiency in its growth.
The gap in the market that Sendcloud (and rivals like Shippo and Stamps.com will be) is addressing is a pretty clear one. E-commerce is now a major channel for retailers of all sizes, and as the market continues to mature, customers are buying online or in person, but still receiving delivery of their goods, services. The levels are getting more sophisticated than they expected.
The point is that small retailers — realistically, anyone who isn’t Amazon, but is particularly new to the e-commerce sector — usually don’t have systems in place to manage that distribution process efficiently. The youngest, van den Heuvel said, physically go to post offices for postal packages; The larger ones can order pickup and shipping directly from specific carriers, but moving it up from there tends to be expensive, and doing so in a flexible way that ensures they’re getting the best prices and the best levels of service, and over time. Most of the options in context.
Amazon has set the bar in many ways about how shipping and delivery work, and what customers expect. This makes it easy for customers to expect and get fast and free shipping through their Prime membership club. It has a vast network of operations for itself and the third parties with which it works, and is directly controlling the various parts of that machine. And, seriously, it already offers shipping as a service, as well as warehousing and a wide array of other options — all wrapped up in the company’s Fulfillment by Amazon (FBA) product.
Sendcloud is essentially an aggregator and integrator that brings together the long tail of e-commerce technology providers used by retailers – including Shopify, Magento, WooCommerce, Amazon, and more than 50 companies with the range of similar companies. There are more integrations. Out Shipping and Delivery Services – DHL, UPS, FedEx, DPD and so on, currently more than 35 (and growing). It is a very fragmented market at both its ends, and so it is all about bringing this together in a seamless way so that retailers can discover and select only services that work for their needs. And it’s all automated and integrated into their check-out: choosing and arranging shippers is no longer a manual effort.
SendCloud falls into the same category, with startups addressing the physical aspect of e-commerce in other areas such as freight forwarding and warehousing by building cloud-based platforms to weave these services together. This represents a huge opportunity — the delivery market is expected to grow from $475 billion today to $591 billion in 2024, the company estimates — if it’s one that the average consumer will never have to deal with as much. Their retailers do. As e-commerce continues to grow, so too will it need to function properly.
“Growing parcel volumes and the demand for flexible delivery have increased the need for smart shipping solutions among online merchants,” said Pipilis, Managing Partner, SoftBank Investment Advisors, in a statement. “SendCloud has built a leading all-in-one shipping platform that aims to help merchants easily integrate functionalities such as checkout, shipping, tracking, returns and analytics. We are promoting the next wave of e-commerce enablement. We are pleased to partner with Rob and the SendCloud team to support our mission.
“SendCloud’s scalable, intuitive and highly localized platform is at the forefront of enabling sophisticated shipping for online merchants across Europe,” said Christopher North, Managing Partner Took Catterton. “We are excited to partner with the exceptional SendCloud team to leverage our consumer-focused e-commerce experience and deep expertise working with high-growth technology and software businesses to drive continued innovation and To position the company for growth globally.”
SendCloud said that SoftBank Investment Advisors’ Neil Cunha-Gomes and Monica Wilk, and Took Catterton’s Ido Krakowsky, all joining its board.