Investment in last-mile delivery firms is so hot right now that investment rounds are coming just weeks after previous funding rounds at some firms.
The latest is Veho, which reached unicorn status in a December funding round. The company’s valuation has now climbed to more than $1.5 billion following the announcement of a $170 million series B round led by Tiger Global and Softbank Vision Fund 2.
The latest funding was announced Tuesday morning.
“In an incredibly complex industry that has historically lagged in innovation and customer focus, we’re bringing greater efficiency, transparency and control,” said Itamar Zur, co-founder and CEO of Veho. “Our brand partners are looking for an accelerated path into new markets, and more ways to bring the customer to the forefront to increase brand loyalty and lifetime value.”
Existing investors, including General Catalyst, Bling Capital, Construct Capital, Industry Ventures and Origin Ventures, participated in the latest round. Other notable investors include The Chainsmokers Mantis VC Fund and the founders and CEOs of Allbirds, Everlane, FIGS, Harry’s, Flexport and Warby Parker. Total funding has now surpassed $300 million.
The earlier series A round announced on Dec. 21 was for $125 million and was led by Construct Capital. Additional participants in that round included Bling Capital, Industry Ventures, Fontinalis Partners and Origin Ventures.
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Veho provides next-day service for parcels, specializing in e-commerce parcels. It claims that its technology-driven solution provides brands — which include apparel, accessories, and food and packaged goods companies — a 20% increase in customer repurchase, 40% increase in customer lifetime value and 8-point increase in net promoter score compared with customers who received their boxes from a traditional shipping company.
The company provides customers with insight into their package deliveries, providing details on what time the delivery driver should arrive, and driver en route notifications while allowing for real-time rescheduling, address changes and personalized delivery instructions. It utilizes a crowdsourced driver network and company-operated warehouses to help fulfill orders.
Veho is currently operating in major cities in Colorado, Texas, Illinois, Indiana, Georgia, North Carolina, Maryland, Pennsylvania and Washington, D.C. Drivers working with Veho book routes that last between two and six hours and can choose the days they work. 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 said the new funding will be used to accelerate its deployment across the U.S. while expanding its warehouse automation capabilities. In addition, the company plans to scale its recently launched doorstep returns program nationally and continue investing in the customer experience with features such as a real-time transportation visibility program.
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Headcount is expected to grow from about 500 employees today to more than 2,000 by the end of this year. This will include hiring an additional 150 software engineers and investing in corporate development capabilities to evaluate opportunities for strategic acquisitions, it said.
“The parcel delivery industry is straining under enormous demand and a permanent shift toward residential delivery. Veho’s highly flexible and consumer-centric delivery network is an ideal solution,” said Griffin Schroeder, partner at Tiger Global.
“As e-commerce sales continue to soar, last-mile delivery capacity has not kept pace, nor have logistics companies made the technological investment necessary to support a level of customer service that is expected by a new generation of consumers,” said Lydia Jett, managing partner at SoftBank Investment Advisers. “We believe that Veho has built a leading position in this market with an integrated technology platform that facilitates flexible and reliable delivery services, which drives conversion and customer loyalty. We are thrilled to be partnering with Itamar Zur and the team to support their mission to reinvent delivery.”
Veho’s customers include HelloFresh, Misfits Market and thredUP.
Click for more articles by Brian Straight.
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