Ecommerce has undoubtedly seen a huge acceleration in growth in the last year and a half of Covid-19’s life, with people turning to the web and apps to purchase essential and less essential items to keep their social distancing, and using delivery services to receive their goods rather than picking up things in person.
Today, a Dutch startup called Sendcloud that has created a service to help retailers with the latter – by providing a cloud to easily organize and perform shipping services by choosing from a wide range of carriers and other options – announces $ 177 million in funding, a major investment that is a testament to not only Sendcloud’s recent growth, but demand in the market for what it does: provide an efficient and viable alternative to simply turning to Amazon for fulfillment, or go through the expensive, manual process of sorting out the shipment directly with the companies providing it.
“We try to provide Amazon-level logistics to all other merchants,” said Rob van den Heuvel, CEO and co-founder of Sendcloud, in an interview. Before the lockdown, he said the company – which now has 23,000 customers – averaged 70 to 80 percent growth each year. During the lockdown, that rose to 120%, with a 133% increase in package volumes, “And we haven’t seen volumes drop since,” he added.
Softbank Vision Fund 2 – a prolific investor in many parts of the e-commerce ecosystem – leads this Series C, with THE Catterton and HPE Growth are also participating. This is by far the biggest investment Sendcloud has ever had: The Eindhoven, Netherlands-based startup has been around since 2012 and had already raised just over $ 23 million ($ 23 million, $ 23,000 customers sound good).
Van den Heuvel has confirmed that the startup is not disclosing its valuation with this round although a source very close to the deal tells us that it amounts to around $ 750 million.
For reference, Shippo – an American company operating in a similar space but with 100,000 of Sendcloud’s 23,000 customers – in June raised funds at a valuation of $ 1 billion. Shippo has, however, also raised a lot more money and his valuation will also have increased as a result. On the Sendcloud side, our source pointed out that it has demonstrated very high capital efficiency in its growth.
The gap in the market that Sendcloud (and its potential competitors like Shippo and Stamps.com) is bridging is very clear. E-commerce is now a major channel for retailers of all sizes, and as the market continues to mature, customers who shop online or in person while having their products delivered are becoming more sophisticated in terms of what they expect from service levels.
The problem is that small retailers – realistically anyone who is not Amazon, but especially those new to e-commerce – usually don’t have systems in place to manage this delivery process effectively. . The little ones, according to Van den Heuvel, physically go to post offices to post parcels; and bigger ones can order pickup and shipment directly from specific carriers, but find it expensive to scale from there, and do it in a flexible way that ensures they get the best prices and the best levels of service and the most options in terms of timing.
Amazon has in many ways set the bar when it comes to how shipping and delivery work, and in terms of what customers expect. It allows customers to wait and get fast and free delivery through its Prime membership club. It has a vast network of operations for itself and for the third parties it works with, and increasingly directly controls the various parts of this machine. Most importantly, it already provides shipping as a service, along with a wider range of warehousing and other options, included in the company’s Fulfillment By Amazon (FBA) product.
Sendcloud is essentially an aggregator and integrator that brings together the longest tail of e-commerce technology providers used by retailers – it has over 50 integrations with Shopify, Magento, WooCommerce, Amazon and so on – with the lineup of companies that focus on shipping and delivery services – DHL, UPS, FedEx, DPD and so on, over 35 in total currently (and growing). It’s a very fragmented market on both sides, so it’s about bringing it all together in a transparent way so that retailers can simply find and choose services that meet their needs. And all of this is automated and integrated into their cash register: the selection of shippers and their organization are no longer a manual effort.
Sendcloud belongs to the same category as startups that have delved into the physical side of e-commerce in other areas such as freight transportation and warehousing, creating cloud-based platforms to connect these services. This represents a huge opportunity – the delivery market is expected to grow from $ 475 billion today to $ 591 billion in 2024, the company believes – if this is an opportunity that the average consumer has never seen so much. do as its retailers. As ecommerce continues to grow, so will it for it to work properly.
“The growing volume of parcels and the demand for flexible delivery have increased the need for smart shipping solutions among online merchants,” said Yanni Pipilis, managing partner of SoftBank Investment Advisers, in a statement. “Sendcloud has built a leading all-in-one shipping platform that aims to help merchants easily integrate features like payment, shipping, tracking, returns and analytics. We’re excited to partner with Rob and the Sendcloud team to support their mission of fueling the next wave of ecommerce activation. “
“Sendcloud’s scalable, intuitive and highly localized platform is at the forefront of enabling sophisticated shipping to online merchants across Europe,” added Christopher North, Managing Partner at THE Catterton. “We are excited to partner with the exceptional team at Sendcloud to leverage our consumer-centric e-commerce experience and deep expertise in working with high-growth technology and software companies to drive continuous innovation and position the company for global growth. “
Sendcloud stated that Neil Cunha-Gomes and Monika Wilk of SoftBank Investment Advisors, and THE Ido Krakowsky from Catterton are all joining its board of directors.