New York based Zipments, a same-day delivery marketplace that connects retailers with couriers, has closed a $2.25 million seed round to further build out its product and expand to new cities. It’s facing increasing competition from consumer-focused San Francisco delivery heavyweights such as TaskRabbit and Postmates, the latter of which recently raised $5 million to muscle into New York.
FirstMark Capital and Huron River Ventures led the seed investment in Zipments, which also included The Windquest Group, New York City Economic Development Corporation, Chicago Ventures, as well as Robert Safrata, CEO of Novex Couriers, one of Canada’s local same-day couriers. Zipments first launched as a web-only service in Grand Rapids, Michigan in May 2011, and months later expanded to New York and Chicago. It later launched smartphone apps for retailers to request a delivery time, destination, and mode of transport (bike, car, or truck); while couriers can use the apps to accept jobs and manage their logistics. Real-time updates are supplied to the customer. Fees start at $10 per delivery and increase based on urgency, weight, and distance.
The injection of funds will be used to scale the product, which aims to empower smaller and individual operators, such as bicycle couriers, to more efficiently service retailers’ delivery needs.
“We believe we can help revitalize and retool the global $20 billion same-day delivery industry,” said Garrick Pohl, CEO and co-founder of Zipments. “Today’s courier companies are running at dial up speed, using outdated, inefficient business tools while trying to service a broadband world. We’ve created an efficient platform for local delivery services to better serve retailers and businesses around the world.”
Startups are tackling the delivery opportunity from different positions.
Zipments is aiming to modernise an outdated industry rather than creating a new demand for products and services. Zipments has built a platform to allow courier service providers to manage their own deliveries, which is lean compared to the foot soldier model of Postmates and TaskRabbit. However, the latter can generate a greater number of transactions by dealing directly with consumers; in Postmates’s case, its New York app lists products from over 1,000 local restaurants and retailers.
San Francisco’s Postmates has shifted the delivery burden from shops to consumers. It recently launched services in New York, after earlier this year raising $5 million from the Founders Fund and expanding to Seattle. Founded in 2011 with $1.75 million angel funding, Postmates started life as a B2B website but subsequently experienced traction with its consumer-focused Get It Now app – which saved time by allowing couriers to buy goods on behalf of consumers. The dynamic pricing stars at $5, which increases based on time, distance, and location. Couriers have taken to the service, and the urban logistics startup boasts about 200 delivery boys in its home market, and launched in Seattle with about 35 couriers and 50 couriers in New York.
The densely populated city of San Francisco has emerged as a test bed, of sorts, for this service.
Last year, micro-jobs outsourcing marketplace TaskRabbit expanded its iOS-based Deliver Now service to the web, allowing users in the city of San Francisco to demand delivery of anything between the hours of 9am and 7pm. At the time, it flagged an expansion of this to other cities. There are also other logistics services such as Uber, that are eyeing off this space.