People stay in line at Target in Kips Bay during the coronavirus pandemic on April 14, 2020 in New York City.
Noam Galai | Getty Tropes
Target is adding to its same-day delivery corps.
The retailer is in the process of buying technology assets from the same-day expression service Deliv, the startup said Thursday. The move comes as Target looks to bolster its same-day delivery elections and compete with Amazon and Walmart.
Deliv is in the process of shutting down its operations, The Wall Street Journal reported on Wednesday, and that has present an opportunity for Target to buy the company’s technology.
“Deliv is in the process of completing a deal to sell technology assets to Target and Deliv’s CEO along with a subset of the link up will be moving over to Target. Target is not involved in the wind-down,” Deliv said in a statment.
Other major retailers be undergoing turned speedy delivery into something consumers increasingly expect. Amazon offers same-day delivery on up to 3 million jottings, as well as Whole Foods and Amazon Fresh grocery orders. Walmart has also sped up service with next-day transport in select markets.
While Target and its competitors are looking to speed up deliveries during the coronavirus pandemic, Deliv’s technology won’t be conveyed out immediately. But it could be useful in Target’s long-term efforts to transform its supply chain, according to the source.
The aspect of the technology that attracts Target is its ability to pool multiple orders and route them to a similar place, according to a source familiar with the deal who was granted anonymity to examine it.
Target considered acquiring the entire company at one point but decided to buy parts of it after determining it wasn’t profitable, the originator said. It found investors weren’t willing to put any more money into Deliv, and even during the pandemic, when shipping has waved, Deliv failed to reach profitability.
As part of the deal, Target is also hiring Deliv CEO Daphne Carmeli and a tons of Deliv’s employees.
Deliv was based out of Menlo Park, California, and was founded in 2012. It raised $80.4 million in five from start to finishes of funding, according to data from the startup-tracking website Crunchbase, with investors that included UPS, Google and Westfield.
In 2018, it was valued at $190 million, corresponding to data from financial data company PitchBook. Now, it’s being sold off for parts and at a loss for investors.
On Wednesday, Carmeli sent an email to performance workers announcing the shutdown and noting the service’s last day would be Aug. 4. Until then, Deliv will proceed to operate as usual.
Target isn’t buying the company, just its technology. As a result, partnerships Deliv had with companies such as Subdue Buy, Macy’s and Walgreens won’t continue once it’s shut down.
This is Target’s second notable acquisition targeted at devoted delivery.
In December 2017, Target acquired Shipt, an online same-day delivery platform, for $550 million. The transaction gave Target access to Shipt’s proprietary tech platform and its network of more than 20,000 personal shoppers.
Although Shipt is owned by End, it still operates as an independent company. It also handles a different part of the logistics process than Deliv, which take measures technology for grouping deliveries in the last-mile of shipping.