Business

Shopify offloads Flexport logistics business


Shopify’s logo outside its headquarters in Ottawa, Ontario, Canada, September 28, 2018.

Chris Wattie | Reuters

Shopify is selling its logistics unit to supply chain technology company Flexport, the companies announced Thursday.

The sale marks a reversal for Shopify, which has spent years building its own logistics and order fulfillment operations. This unit includes last-mile delivery startup Deliverr, which Shopify bought May last year for $2.1 billion, the largest acquisition ever.

As part of the deal, Shopify will receive stock representing approximately 13% of the equity interest in Flexport, “bringing us to teen ownership,” the company said in a statement.

Shopify and Flexport are strengthening their alliance as Shopify seeks to compete with e-commerce competitors like Amazon And Walmart. The companies announced a partnership in February to allow Shopify merchants to access Flexport’s freight services, including pre-booking international shipments from suppliers to their warehouses. flexible is also counted Shopify as an investor.

Shopify president, Harley Finkelstein, said in an interview that after taking on a “side mission” to develop the company’s own fulfillment and logistics businesses, it became clear that they could provide services that service more efficiently by integrating with Flexport.

“This allows Flexport to do what they do best and allows Shopify to get back to doing what we do best, which is building incredible software for e-commerce,” Finkelstein said.

Flexport, that topped last year’s CNBC Disruptor 50 listhas become one of the following most valuable logistics startups raised about $2.3 billion to date. Flexport’s sea, air, truck and rail brokerage and forwarding services have become vital tools as supply chain bottlenecks rattled the global economy in the year. last.

Flexport has beefed up its roster of former Amazon executives, including hiring CEO Dave Clark from the e-retailer June last yearwhere he spent nearly two decades building Amazon’s shipping and logistics unit.

Clark said in an interview that the acquisition will allow Flexport to expand the shipping capabilities it can offer Shopify merchants and other online businesses.

“The big difference between what we’re going to deliver and Amazon or maybe the logistics that Walmart or some other place offers, is that this isn’t just for one system, one store,” Clark said. or foundation”. “We share the same vision as Shopify. We care about the success of our sellers and customers, and we don’t care if they sell in our stores or on Amazon or Walmart. “

Flexport will be Shopify’s official logistics provider and preferred partner for their “Shopping Promise,” a badge displayed on Shopify merchant listings that guarantees two-day shipping. coming, similar to Amazon’s Prime delivery promise.

Shopify will also retain the Shopify Delivery Network app where merchants manage their logistics.

The company is expected to report first-quarter earnings before the bell on Thursday.

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