Amazon is a massive player, but it is not the only game in town when it comes to fulfillment. In fact, there are many others who know the importance of fulfillment, including Byrd, which has just received a significant amount of funding. The company plans on using the funding to further expand its logistics and fulfillment network and give people more choices. Take a look at the following article to learn more.
Shopify put a spotlight on the role and significance of logistics and fulfillment in e-commerce when it snapped up Deliverr for $2.1 billion last week to gain its own, direct foothold into providing those services for its e-commerce customers a la Amazon. Now, an up and coming startup in fulfillment in Europe has closed a round of funding to fuel its own growth. Byrd, which is building a network of operations providing warehousing, delivery services and software for its e-commerce customers to manage it all, has raised $56 million in a Series C round of funding.
Cambridge Capital is leading the investment, with Speedinvest, Mouro Capital, Elevator Ventures and other previous shareholders also participating. Byrd last raised less than a year ago, a $19 million round led by Mouro. It’s not disclosing its valuation, but the round was closed between rumors of Shopify shopping for a logistics provider (apparently it had also considered Shipbob) and actually getting acquired, so that may have given Byrd some extra attention.
The Berlin-based startup today provides e-commerce customers with “virtual” warehousing in seven countries in Europe — not as a warehouse owner but by taking colocation space in other’s warehouses — along with a suite of software that helps those customers connect with, manage and analyze shipments and deliveries worldwide — and the plan is to use the investment to expand that network and the services that it provides around it, specifically also to build out the operations to work in new verticals like apparel. Today it covers the UK, France, Germany, the Netherlands, and Austria, and its newest warehouses added in Italy and Spain. Sweden, Denmark, and Poland are on the list to launch later this year, totaling 30 warehouse locations in 10 countries.
Byrd’s holy grail, so to speak, is to give its retailers a viable alternative to the kinds of services that one might potentially get via Amazon Prime: fast shipping options, but also a backend to manage the products after they are imported and until they get to their final destination with a customer; and an easy route for returns when those happen. It has a prime opportunity, so to speak, in the fact that merchants today typically are already selling through multiple channels, including their own websites, other marketplaces, and more.
“We already fulfill a ton of Amazon orders,” said Alexander Leichter, the CEO who co-founded Byrd with Sebastian Mach and Petra Dobrocka. “Why wouldn’t they ship through Amazon? Merchants like to be independent and have choice, and consolidate operations between different channels. So it’s not true now and it won’t be true in the future that Amazon is the best solution. There is still a vast opportunity for independent solutions.”
Logistics and fulfillment are two of the most deceptively critical parts of the e-commerce business model. Deceptive, because they don’t appear as visible to the average consumer buying a product; critical, because they have become central not just to the margins made on sales, but also a key differentiator when someone is buying something: delivery costs and time can make or break a sale.
Byrd, which was originally founded in Vienna, has been pecking away at the complexities of the business model for years, originally aiming to build its own network of physical warehouses before turning to a software-led approach based around scaling up and down warehouse space as it needed it for customers.
Dobrocka, the chief commercial officer, said that while the Deliverr acquisition most certainly speaks to more consolidation to come in the 3PL (short for third-party logistics) space, and perhaps also underscores that there might be less “3”‘s among them as e-commerce platforms flex their muscle, retailers are still a substantial enough population that there remains a place for providers like Byrd that are both flexible and evolving in functionality due to being software-based. And regional reach is not to be underestimated.
“Shopify only launched three or four years ago in Germany, and I’d say their coverage in Europe is not that strong,” she said.
The company hasn’t yet launched but has considered how to bring its Amazon-competing model to the very concept of Prime itself, if it manages to achieve more scale to make it worthwhile. (Something that Shopify is perhaps considering, too, given its growth and ambitions.)
“There are some thoughts around ‘prime,’” said Leichter. “It’s something that makes sense. For consumers, they might shop from more than one merchant, and say we have two merchants that sit in same warehouse but they order through different websites. It would make sense to combine those and better customer experience. But it would be premature to do this yet. We need a lot of merchants to get there.”
That scale is something that Amazon itself has not only reached with business on its own marketplace but well beyond it. The company has been offering FBA (Fulfillment by Amazon) for years at this point and in April launched Buy with Prime, a new front in its Prime model that will see Amazon offering it as a payment option to Prime members on the sites of merchants themselves, and likely in other places too over time. This is something Amazon had been working on for years prior, a mark of just how complex something like this is to implement in terms of bringing on partners and making the whole process cost-effective. Notably, even in its launch it’s starting small working with customers who already work with Amazon already (and likely use its warehousing, for a start, making the onboarding easier).
All of that may look like daunting competition in one respect, but in another it’s an opportunity because there will remain companies that do not want to lock into the Amazon ecosystem, and it leaves a lot of room for more flexible and innovative approaches for smaller players. And notably Buy with Prime is currently only being rolled out in the U.S..
Matt Smalley, a principal at Cambridge Capital, is joining the company’s board with this round.
“Byrd is one of the fastest-growing companies we have seen, at what we think are the strongest unit economics in the industry. We were convinced by their tech-driven approach and proprietary warehouse management software, which enables byrd to run an asset-light fulfillment network,” he said in a statement. “Byrd’s broad coverage of the European market, excellent customer momentum and strong satisfaction with both retailers and warehouse partners appealed to us right away.”
The original article can be found on TechCrunch.