Delivery speed is a top priority for online shoppers. But it can be difficult for retailers not named Amazon to ship products to your door in a matter of days or hours.
Shipium has a solution — and investors like what they see.
The Seattle logistics startup just raised $27 million to help fuel growth of its software that helps e-commerce shops manage fulfillment. The Series A round, led by Insight Partners, follows a $8 million seed round raised in June.
Shipium wants to solve the “Prime problem,” a phrase it uses to describe the struggle to keep up with consumer expectations set by Amazon’s fast shipping capabilities.
The company’s founders know something about that.
CEO Jason Murray spent nearly two decades at Amazon, running supply chain teams and overseeing thousands of employees as a vice president. Co-founder Mac Brown was also an early Amazon employee; he and Murray started three days apart from each other in 1999. Brown later joined Zulily, where he was vice president of supply chain and fulfillment software for the Seattle online retailer.
Shipium’s services work with existing systems and help companies make fulfillment decisions, such a deciding which shipping option is fastest or cheapest, or which box size is most optimal.
“You have to find a way to offer a compelling delivery experience to keep Amazon from eating your market share,” Murray said.
The startup targets mid-sized retailers that have their own infrastructure but can’t afford to build out the type of software that giants such as Amazon and Walmart use to coordinate and optimize e-commerce operations.
“We’re essentially giving them the technology that lets them compete with Amazon,” Murray said.
Amazon CEO Andy Jassy addressed the company’s shipping prowess in his annual shareholders letter published Thursday. “Delivering a substantial amount of shipments in one day is hard (especially across the millions of items that we offer) and initially expensive as we build out the infrastructure to scale this efficiently,” Jassy wrote. “But, we believe our over 200 million Prime customers, who will tell you very clearly that faster is almost always better, will love this.”
Since launching in late 2019, Shipium has processed around 10 million shipments and is on track to process more than 50 million by the end of this year.
Murray said the 30-person company is thinking about expanding its software to “physical infrastructure” such as trucking and warehouse space.
He added that the recent supply chain chaos has been a net-positive for Shipium’s business. “The way to combat [supply chain problems] is with diversity of your carriers and systems that dynamically adjust over static rules,” Murray said.
Shipium is the latest software startup to ride tailwinds from the e-commerce boom amid the pandemic, as more retailers look for back-end solutions to support online demand. Others from the Seattle region that have raised funding over the past few years include Flexe, Logixboard, Stackline, Fabric, FlavorCloud, Pipe17, Pandion, and SoundCommerce. Several of those companies are led by former Amazon employees.
“The pandemic has accelerated e-commerce growth to unprecedented heights, but major retailers continue to grow in both revenue and market share, largely due to their superior shipping experience,” Brad Fiedler, vice president of Insight Partners, said in a statement. “Jason, Mac, and the team’s background positions them as the foremost experts on how to help the rest of the retail industry compete for customer growth and loyalty.”
Existing backers including Trilogy, Good Friends, and PSL Ventures participated in the latest round. Total funding for Shipium is $38.7 million to date.
