‘Logistics as a Service’ isn’t an entirely new idea. Index-backed MetaPack already helps large online retailers compete with Amazon in the delivery stakes, while Accel-backed Packlink offers something broadly similar for consumers and eBay ‘power sellers’. However, today sees another startup enter the space.
Denmark’s Shipbeat, which is currently running a beta in its home country, plans to offer an API that aggregates the services of leading parcel delivery companies, such as UPS, Fedex, Royal Mail, Deutsche Post, and DHL etc., in a bid to solve the delivery woes of small to medium-sized e-commerce businesses and enable them to give customers all of the delivery options they desire.
It’s not simply enough to offer delivery; customers demand flexibility and a high level of customer service related to receiving (and returning) goods purchased, such as next or same day delivery, and this is now a key driver of conversion and retention in e-commerce. That’s the pain-point Shipbeat is setting out to solve.
The idea was born from Shipbeat co-founder and CEO Kenneth Svenningsen’s own frustrations. He was formerly CTO of fashion e-commerce site Miinto and a manager at startup factory Rocket Internet and so knows the problem of integrating logistics carriers first hand.
“At Miinto we needed to integrate multiple shipping carriers into our e-commerce platform to improve operations (labels, booking of pickup etc.) in all our markets. That meant making and maintaining integrations up against legacy shipping carrier systems, which was very time-consuming and painful,” he says. “We kept asking ourselves, why do we even face this problem today? We needed a single and simple solution, much like a modern payment service provider like stripe, but for logistics.”
Furthermore, Svenningsen says he learned that delivery is “critical for the most fundamental problem every online shop has,” which is converting and retaining customers, arguing that marketing dollars are wasted when 20-70 percent of prospective customers drop their shopping carts due to lack of appealing shipping options.
“So on the surface we set out to solve a technical problem to improve e-commerce logistics. In the end we are solving a big conversion and retention problem for online shops, which allow SMEs to compete with the big players. You need to offer a great delivery and returns experience in todays e-commerce landscape,” he adds.
Shipbeat is also disclosing fresh funding today. It’s raised a $1.6 million seed investment led by Sunstone Capital, SEED Capital and Klaus Nyengaard, the former JustEat CEO. The new funding will be used to further expand the company’s product, hiring and to complete the necessary key e-commerce software integrations.
“I’m really excited about the segment,” Sunstone’s Max Niederhofer tells me. “With Stripe and Paymill we got the APIs for payment integration in e-commerce; with Shipbeat we are getting the logistics API.”