In a bid to tap into Florida's retail supply chain, e-commerce fulfillment platform ShipHero announced on Friday the acquisition of Jacksonville-based Cargo Cove Fulfillment, a full-service logistics company with over 50 partnering e-commerce brands. Those companies will now be integrated into ShipHero's network of 5,000-plus partnering brands.
For ShipHero, the movie is all about growth. The company now has a presence in the most populous city in one of the most populous states, bolstering the New York-based service's reach up and down the East Coast. It will also open up the state to faster service from the world's largest e-commerce marketplace, Shopify (NYSE: SHOP), for which ShipHero is the official fulfillment network partner.
"[Cargo Cove Fulfillment CEO Robert McFaul] and his team is committed to excellent customer service, so it already feels like an incredibly natural integration," said Aaron Rubin, founder and CEO of ShipHero. "On top of that, the location enables us to do even more for our customers. We'll now have a dedicated team that can reach Florida and much of the Southeast in the next business day."
Cargo Cove Fulfillment was founded in 2017 and has since shipped over 1 million orders. The company offers an array of services, including picking and packing, order fulfillment, inventory management, product sourcing, prep assembly, and returns management. Cargo Cove Fulfillment's customers will join ShipHero's fulfillment service.
This acquisition is ShipHero's first since raising $50 million in June in a funding round led by Riverwood Capital, which valued the company at around $225 million. That money came after ShipHero experienced remarkable revenue growth of $30 million on a budget of just $435,000 raised by family and friends.
ShipHero's two main value propositions are its software-as-a-service (SaaS) and its e-commerce fulfillment platform. The company's SaaS offering consists of a TMS for e-commerce companies that ship parcels and a warehouse management system for customers that manage their own inventories. It is projected to handle nearly $10 billion in gross merchandise value this year. The service accounts for about $13 million of ShipHero's annual revenue.
The company's e-commerce fulfillment platform works a bit differently from the standard model. Customers deliver their products to a single ShipHero facility and pay a flat rate for the company to deliver anywhere in the U.S. within two days. It then moves the inventory in smaller shipments to one of its nine facilities and fulfills orders from there. The fulfillment side of the business accounts for about $20 million in annual revenue, and the company is continuing to expand its network of warehouses.
ShipHero's customers include notable names like Mars, Universal Music Group, and Canadian Tire.
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