On January 19, 2022, provider of e-commerce fulfilment and technology solutions ShipMonk announced its acquisition of Ruby Has Fulfillment, a logistics technology company and a former competitor in the online fulfilment space. According to sources, the deal was sealed in November 2021 for an undisclosed sum.
Like Ruby Has Fulfilment and other companies including ShipBob and Deliverr, ShipMonk was born with a desire to serve small and medium sized business, whose e-fulfilment needs were traditionally catered by independent warehouses run as single units. ShipMonk spotted a gap in the market and aimed at adding value to services offered to small shippers through its technological capabilities and features such as inventory tracking, integrations of the retailer’s store via API, and packaging using predefined guidelines. ShipMonk’s annual revenue doubled in 2020, when the company found itself acquiring more customers whose logistics capabilities were unprepared to face unprecedented online sales growth. As a result, the provider experienced a 100% growth in its customer base and order volumes that grew more than 115% year-on-year at their November peak. The company reached unicorn status earlier in 2021 according to sources.
With the acquisition, ShipMonk will not only deepen its reach in the United States, but it will also complete its expansion in North America, adding Canada to its network, and additionally entering the UK market, where its rival ShipBob was already present since March 2021. ShipMonk had also been hinting for some time at its intention to open a European fulfilment centre.
Its warehouse space now totals more than 2.4m sq ft, doubling its previous size, and includes Ruby Has Fulfilment’s eight fulfilment centres across New York, Nevada, New Jersey, Kentucky, California, Canada and the UK. Prior to the acquisition, ShipMonk’s existing locations already spanned across Florida, California, Pennsylvania and Mexico. The latter was added to the provider’s portfolio in October 2021 through another acquisition when El Mar Logistics was snatched up by the company. Additionally, Ruby Has caters to slightly larger retailers than ShipMonk, signalling the company’s desire to extend and diversify its customer base.
Earlier in 2021, Jad Bednar, ShipMonk’s founder and CEO, commented: “Every e-commerce retailer has been negatively impacted by supply chain hold-ups in some manner and seeks to operate more efficiently. Expanding our footprint globally not only widens the scale of our operations but diversifies the customer base we can attract with ShipMonk’s services – the more resources and locations we can offer enables our customers to scale to new geographies seamlessly.” After the recent acquisition, Bednar further indicated its desire to carry out more M&A, both domestically and internationally, reports Business Insider.
But the company has not been the only technological logistics provider eyeing inorganic growth. Q4 2021 has seen ShipHero making two warehouse acquisitions, and Cart.com at least tripling its footprint by acquiring FB Flurry at the beginning of January 2022. It might be the case that with the real estate market reportedly running out of industrial space, both in Europe and in the US, and the emergence of a ‘year-round peak season’, a year-round race for M&A could also take place in 2022, fuelled by smaller technology providers willing to scale up their operations and grow inorganically to grab a bigger slice of the e-fulfilment market.
Source: Transport Intelligence, January 25, 2022
Author: Caterina Ciccone