26-year-old Michael Krakaris cofounded Deliverr with his former boss.
This past year was an unprecedented one for e-commerce sales, which grew 44% in the pandemic. While giants like Amazon and Walmart, with their sheer scale and same-day shipping, have dominated, Deliverr, a logistics and fulfillment company that expedites shipping without upcharging consumers, has captured a piece of the pie.
“It’s just this massive wave for ecommerce—that’s what Covid really set off,” says Michael Krakaris, Deliverr’s cofounder, who made the 2019 Forbes 30 Under 30 Retail & Ecommerce list. “And we’re one of the best-suited companies to do that.”
On Wednesday, Deliverr announced that it has raised a $170 million Series D led by Coatue with participation from Brookfield Technology Partners, Activant Capital, 8VC and GLP, bringing its total funding to $240 million.
Krakaris, 26, founded Deliverr with Harish Abbott in 2017 to simplify the complicated process of fulfilling online orders. It rents and stocks products from company clients—including TikTokers Josh Richards and Bryce Hall’s Ani Energy and specialty pillow company Huggaroo—in 52 warehouses in 17 states across the U.S., and ships direct to consumers from those locations, rather than from a singular corporate facility. The majority of customers of companies that partner with Deliverr receive deliveries within 48 hours. In major cities like New York and Los Angeles, that turnaround time can be within 24 hours (subject, of course, to inventory, weather and other variables).
Whereas Amazon and eBay often charge consumers for expedited shipping, Deliverr does it for free. It makes money by charging businesses to store and ship their goods from Deliverr-rented warehouse space—for as little as $0.05 for a single phone case. Deliverr’s 150-person team has fulfilled millions of orders for more than 5,000 businesses, around 3,000 of which became customers last year. And over the past year, Krakaris says revenue has increased by 600%.
While the majority of Deliverr’s business is direct-to-consumer fulfillment, it also works with customers selling through platforms like Walmart Marketplace and Amazon’s Fulfilled by Merchant program, through which orders are not eligible for W+ and Prime, as well as Shopify. For small businesses who sell through the latter, Deliverr increased sales from two-day shipping by 44%, and next-day delivery by 75%, proving return on investment for small businesses like Hey Dude Shoes that are looking to convert internet surfers to customers. Deliverr is a fully self-service platform and is able to keep costs to customers low by charging flat fees on bulk storage and fulfillment, versus competitors like Google, Wish and eBay that charge per item shipped.
As retail has been forced by the pandemic to embrace a new, digital frontier, companies like Brookfield—America’s second-largest mall operator with a market cap of over $63 billion, and an investor in Deliverr—have been looking for ways to outfit retail properties with ecommerce features. Brookfield, for example, believes its malls’ empty storefronts may serve as Deliverr warehouses. And because 60% of the U.S. population lives within a 30-minute drive of a Brookfield mall, these properties can provide a hybrid retail-ecommerce experience for shoppers via Deliverr.
“Deliverr is Amazon Prime for everybody else,” says Brookfield Technology Partners’ Managing Partner Josh Raffaelli, who contributed a $35 million convertible note. “It’s about empowering merchants with the most important variable in sales, which is speed of delivery.”
Krakaris agrees, and with his newfound funding, plans to expand Deliverr’s warehouse capacity and double its workforce to extend next- and two-day shipping to more of America. Alex Kolicich, founding partner at 8VC, who not only invested in Deliverr’s Series D, but wrote the cofounders their first check in 2017, believes the company has the potential to capture a $100 billion-plus market.
“In terms of B2B, it’s one of the fastest growing companies we’ve ever seen,” says Kolicich, whose portfolio includes Wish, Flexport, Asana and Branch. “Everyone orders things online and has used Prime. You tell them Deliverr is building the infrastructure to make a Prime-like experience for all ecommerce—[the investment] becomes intuitive.”