There’s an increasing number of e-commerce retailers, each of which seeks to provide fast, reliable and most importantly, affordable shipping to customers. But most of those businesses can’t compete with the likes of Amazon, which has created enormous economies of scale around its warehouses and distribution centers.
A startup called Shippo wants to provide those online retailers with a lower-cost alternative to their existing shipping practices. It does this by hooking into existing e-commerce solutions like Shopify, as well as by providing an API that can be used by retailers to simplify and automate the process of shipping items.
Its system not only makes shipping easier, but also makes it more affordable for customers. Because Shippo aggregates the volume of goods being shipped from multiple vendors, it can get steep discounts on shipping. It then passes those lower costs to its retail partners, who all benefit from being part of its virtual warehouse of goods.
In addition to lowering the cost of domestic shipping, the company also provides tools that allow e-commerce businesses to expand their shipping internationally. In addition to lower rates and helping its customers to find the best providers for various different regions, Shippo can help automate the process of filling out and printing customs forms.
Up until now, Shippo has been focused on powering a number of independent retailers, and has 5,000 customers signed up already. It’s growing 20 percent month over month, thanks to customers and partners like GoDaddy, Memebox, Shop Hers, Shyp, Vinted, and the Mercari app. But it’s looking to grow its business through channel partnerships that will give it exposure to a wider group of customers.
After graduating the 500 Startups Accelerator earlier this year, Shippo now has eight employees and is looking to expand. To do that, Shippo it raised $2 million in seed funding led by SoftTech VC, with participation from investors that include Version One Ventures, 500 Startups, Joanne Wilson, Slow Ventures, Fabrice Grinda, and other angels. Along with the funding, SoftTech’s Jeff Clavier joins the company’s board of directors.