ShipBob raises $17.5m Series B funding

US e-commerce shipping and fulfilment business ShipBob has raised $17.5 million in a Series B round led by Bain Capital.

According to ShipBob, it will use the money on hiring software engineers to build out its software platform. This planform helps retailers decide where to place inventory by identifying ShipBob warehouses that are closest to their areas of high demand.

ShipBob will also use data to build a number of warehouses in areas of the US with higher shopper density. This will enable their client companies to ship their goods more quickly and cheaply to more customers. This is standard practice for the firm, and something that it has done before.

ShipBob is aimed at smaller e-commerce companies who do not have the capital to invest in FCs such as those Amazon uses. As part of the deal, ShipBob offers free to use order management tools for businesses across a number of channels including Amazon and Shopify. This give smaller players a look in when competing against the likes of Amazon and Walmart who have the advantage of volumes reducing overall shipping costs and their own logistics networks.

Industry watchers believe that firms like ShipBob will force the next paradigm shift in the e-commerce supply chain. Fast and free shipping is known to win shopping carts and by offering smaller firms this service so they can compete with the giants that do already, without having to use the costly Amazon FBA service for example. Up until now (with the exception of Amazon’s FBA), third party logistics firms have geared their offerings to giant companies in much the same way as Ocado has its grocery deliveries to Morrisons. The smaller business end of the market has been under-served by this sector. ShipBob’s ability to raise funds suggests that there is real potential at this end of the market.
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