This morning, Shippo, a software company that provides shipping-related services to e-commerce businesses, announced a new investment of $ 45 million. The new capital values the startup at $ 495 million. TechCrunch calls the new funding a Series D because it is a fee-based round that followed its Series C; the company has not given the tour a nickname.
Shippo’s 2020 Series C, a $ 30 million deal announced last April, valued the company at around $ 220 million. D1 Capital ran Shippo’s Series C and D, which implies that he was content to pay roughly twice as much for the company’s equity in 2021 than in 2020 (remember investors doubling on bets as the main investor in successive rounds is no longer seen as a negative signal regarding the quality of the start-up, but a positive indicator.)
Why collect more money so soon after his last turn? According to the CEO and founder of Shippo Laura Behrens Wu, his company made significant progress in customer acquisition and partnerships over the past year. This led to a decision, around the time of Shippo’s fourth quarter board meeting with its investors, that it was a good time to invest more capital in the company.
In a sense, the timing is reasonable. As Shippo expands its customer base, it can negotiate better shipping deals with various suppliers, which in turn helps it continue to attract new customers. Behrens Wu noted in an interview with TechCrunch that when her company was helping its first customers ship just a few packages, the shipping companies it supports on its platform didn’t want to meet with the startup. Now armed with a larger volume, Shippo can recycle customer demand into a lever for partnership, thus improving its total customer offer.
Behrens Wu said Shippo secured such a partnership with UPS before launching their new round.
On the growth front, Shippo doubled its platform spend, or “GPV” last year. GPV is the acronym of the company for gross postage volume. This roughly tracks revenue, TechCrunch confirmed. So Shippo probably doubled its turnover last year. Its good. Shippo wants to do it again this year, Behrens Wu told TechCrunch. The startup will also double its workforce this year, adding around 150 people.
Now with more capital, what’s next for Shippo? According to its CEO, the startup wants to invest more in platforms (where Shippo is baked in a market, for example), international expansion (Shippo only does a “little bit” of international shipping, by Behrens Wu ), and double what it considers its customer base.
TechCrunch was curious how far Shippo could take its product from its original home in the shipping labels. The startup said there is plenty of room in a pack’s journey, from pre-purchase to, in which their business could grow. However, Behrens Wu has warned that such expanding product work is not an immediate priority for his company.
Let’s see how long the current e-commerce boom lasts and how far this new capital can take Shippo. If it doubles in size again this year, we’ll have to start the countdown to its IPO in mid-2022.