Growing logistics startup ShipBob raises $40 million in Series C, opens new fulfillment center

  Photo: Shutterstock

Photo: Shutterstock

Growing ecommerce logistics company ShipBob has raised $40 million in Series C funding and opened a new 150,000 square foot fulfillment center in Chicago. This is all part of the startup’s mission to help independent ecommerce businesses battle giants like Amazon.

In a world where two-day shipping has shifted from a luxury to an expectation, ShipBob helps ecommerce businesses without their own high tech logistics operations hold their own.

“A lot of searches now start on Amazon, and these people are working hard to get their name in front of consumers. But if their product gets delivered in 10 business days or seven business days, the customer says, ‘okay, if the products are similar, maybe I can go with another product from Amazon which can be delivered faster,’” ShipBob Co-founder and COO Divey Gulati said. “Bridging the gap is really important, and if you can get the same customer experience outside of Amazon, that’s really powerful, and that’s why these brands like ShipBob.”

Gulati noted that ShipBob does not only exist to streamline the shipping process, the company also helps its clients achieve success by taking a significant amount of work off ecommerce entrepreneurs’ plates.

ShipBob’s Series C funding was led by Menlo Ventures, and Menlo Ventures Partner Shawn Carolan has joined ShipBob’s board of directors. Carolan admires the company's commitment to helping small businesses thrive.

“We love how ShipBob lets smaller, creative merchants affordably offer fast shipping across the country. Customers want what they want, and they want it fast, and it takes serious technology to make it look easy,” Carolan said in a ShipBob blog post. “We’re excited to help them continue the successful growth they’ve experienced over the last four years helping small businesses succeed.”

Existing ShipBob investors also participated in the most recent round of funding, including Bain Capital Ventures, Hyde Park Venture Partners, Hyde Park Angels, and Y Combinator. 

ShipBob will use the funds to expand its fulfillment center network, grow its team and develop more solutions for online retailers. The company grew from 60 to 400 employees after it completed its Series B last summer, according to a ShipBob blog post.

The company’s new Chicago fulfillment center is representative of its rapid growth. The new center is six times larger than ShipBob’s original Chicago location and over twice the size of the next largest ShipBob facility, according to a company blog post.

The new fulfillment center is set to house over three million units for thousands of customers by the end of the year. Not only are new ecommerce companies continuing to look for services like those offered by ShipBob, but many of the companies existing customers are expanding and creating more work for ShipBob, according to Gulati.

“When our lease expired at our old location, we seized the opportunity to increase our footprint in the Chicago area to support the scale and growth we are seeing in the marketplace,” said ShipBob CEO and Co-Founder Dhruv Saxena said in the blog post. “As demand from ecommerce companies grows across the Midwest region, we have the chance to bring customers the high-quality shipping and logistics they desire.”

ShipBob’s new facility will bring an estimated 60 new jobs to the Chicago area during non-peak season, with that number ballooning to 100 during peak season, according to the company.

While hardwork and determination undoubtedly propelled ShipBob forward, Gulati also attributes much of the company’s rapid growth to being in the right place at the right time.

“We would not be growing if the market wasn't massive. Based on the recent trends in ecommerce, we’re in the right place at the right time,” he said. “If we were doing this 10 years ago when people didn’t expect two-day shipping, things would have been completely different.”

ShipBob has fulfillment centers in Chicago, Dallas, Los Angeles, New York and San Francisco. The company provides same-day delivery in these markets. Gulati said he would like to see ShipBob expand until it can provide same-day delivery across the nation.