Fresh off two consecutive rounds of fundraising that landed it $300 million in just three months’ time at a $1.6 billion valuation, last-mile delivery firm Veho is now focused on scaling its business. The company on Thursday took a step in that direction, announcing the acquisition of QuikReturn, a post-purchase reverse logistics firm.
Terms were not disclosed.
“We have been incredibly impressed with the technology and carbon-neutral pickup platform the QuikReturn team has developed — both of which are complementary to Veho’s offering. We are excited to bring on board an exceptional team that shares not only our mission to help ecommerce brands increase customer loyalty through an incredible delivery and returns experience, but also our values of putting the human in the center of everything we do for our customers, driver partners and our team members,” Itamar Zur, co-founder and CEO of Veho, said in a statement. “Integrating QuikReturn’s smart and user-friendly doorstep return solution into Veho’s offering will allow us to provide an even more exceptional service and is an important step toward making doorstep returns a key driver of growth and customer retention for ecommerce brands.”
QuikReturn is Veho’s first acquisition. The New York-based technology company serves e-commerce brands in the New York City area. In an exclusive interview with Modern Shipper, Fred Cook, co-founder and CTO of Veho, and Ethan Susser, co-founder and CEO of QuikReturn, said the combination of the two companies will allow each to grow and create end-to-end delivery and returns operations for e-commerce customers across the country.
“From our side, for the last four years, we have been hyperfocused on the delivery experience and building an incredible delivery experience for our customers,” Cook said. “We have proven that building a great delivery experience drives incredible value for brands.”
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Cook said Veho’s delivery platform — which utilizes gig economy drivers to handle next-day delivery of parcels, primarily for e-commerce brands — allows brands to increase customer repurchase 20% and improves customer lifetime value 40% due to a superior delivery experience.
Drivers working with Veho book routes that last between two and six hours and can choose the days they work, Cook said. Once logged in, the driver heads to the local Veho warehouse, picks up the orders for the booked route and heads out to make the deliveries. Veho is currently operating in 18 markets, including Washington, D.C., and major cities in Colorado, Texas, Illinois, Indiana, Georgia, North Carolina, Maryland and Pennsylvania. It’s most recent launches have been Indianapolis; Fort Lauderdale, Florida; and Milwaukee. It will be adding about one new market a week for the rest of the year and expects to be operating in about 50 cities by year’s end.
But while Veho has built its business on completing the final mile, the returns process was still in its infancy. Cook said the company did a returns pilot test late last year to learn what the process was like and what was needed to excel at it.
“We saw how much we have to learn there,” he said. “We learned a lot of what this needs to look like and what the potential products need to be. It was actually after that [pilot] that we met Ethan and his team and learned that they had a lot of the learnings [we found already in place].”
Cook added that the QuikReturn team represented “kindred spirits” with Veho’s team, making the move easier. Susser echoed those thoughts, noting that it was obvious the cultures would mesh well.
“From a culture and vision standpoint, I knew there was a fit there from day one,” he said.
Founded in early 2021, QuikReturn was born out of frustration Susser was experiencing with his own returns experience.
“I always had boxes piling up,” he said. “I was missing return windows because there were so many hoops to jump through. I wanted to reimagine the returns experience altogether.”
Susser, who founded the company with Ashar Nadeem, said the rise of digitally native e-commerce providers convinced him that an at-home pickup service for returns made sense.
“They don’t have large brick-and-mortar locations to leverage returns,” he said. QuikReturn aggregates returns so rather than shipping back a single parcel to a brand, it collects enough items for a single, larger shipment that can be delivered to a store or shipped to a distribution center.
Cook said that QuikReturn will be integrated into Veho’s operations eventually but will initially remain a separate entity.
“The goal is not to distract our core operations team from scaling the [Veho] setup,” he said, adding that Susser will lead a team that builds out the returns process so that it can be scaled across the country as Veho scales. Cook added that efficiencies will eventually be gained as the services are integrated, but “we don’t feel the need to do that immediately and instead we are [focused] on scaling really fast.”
Veho’s current driver force will also handle returns. Initially, separate drivers will handle returns, but that too will likely be integrated into a single operation, allowing drivers to handle both inbound and outbound services.
“We’ve known from the beginning that we need to be a full-cycle [business offering deliveries and returns],” Cook said. “The funding allowed for more investment in returns.”