Same-day delivery company Deliv will continue to roll out its services to additional cities and add a reverse logistics feature, thanks to a $28 million investment announced Wednesday by a group of firms led by transport and logistics giant UPS Inc.
The investment is the third round of funding for the Menlo Park, Calif.-based startup, which carries e-commerce purchases for such retailers as Macy's, Bloomingdale's, and Best Buy Co. Deliv was founded in 2012 with $1 million in seed funds and added $12.5 million in funding in 2013.
The latest investment comes from the UPS Strategic Enterprise Fund, in combination with a consortium of mall operators and real estate investors including Upfront Ventures; RPM Ventures; PivotNorth Capital; General Growth Properties; the Macerich Co.; Simon Venture Group; Taubman Centers Inc.; and Westfield Corp. Deliv did not disclose how much money each party contributed.
The fresh capital will allow fast-growing Deliv to hire sales and operations employees for customer service and account management, CEO Daphne Carmeli said in an interview yesterday. Deliv also plans to invest in reverse logistics, allowing customers to schedule its drivers to pick up unwanted purchases from their homes and return them to the retailer, she said.
"What we really want to do is lay down the plumbing across the country to make same-day delivery ubiquitous," Carmeli said. "Now we have the war chest to do that."
UPS said in a statement that its investment could help it learn more about the fast-growing same-day delivery market sector. "Deliv has gained a strong position in the same-day delivery market by offering a unique solution that serves some of the largest retailers in the U.S.," UPS executive vice president and chief commercial officer Alan Gershenhorn said. "Our Strategic Enterprise Fund continues to invest in companies that have innovative business models, and we look forward to gaining further insights into the market dynamics of same-day delivery."
Deliv doesn't own transport assets. Instead, it contracts with part-time employees who drive vehicles to shopping malls, where they pick up a pool of parcels from multiple retailers for same-day deliveries. The company uses software to direct drivers to multiple pickup and drop-off points, which can change throughout the day. The software also maps efficient driving routes and ensures that each driver uses an appropriate vehicle for the load. "We won't dispatch a Mini Cooper if a 42-inch TV is ordered," Carmeli said.
The operation is invisible to consumers, who interact only with the retailer's e-commerce website. Deliv serves as a back-office partner with each retailer, allowing users to add same-day delivery options to their checkout pages, alongside ground shipping and overnight.
Deliv acquired Grand Rapids, Mich.-based Zipments in November 2015 for an undisclosed amount. The move allowed Deliv to extend its service into the enormous New York City market.
Deliv serves 17 markets and will continue to add regions as it signs up enough retailers and local merchants in each area to keep its drivers busy.