Target buys same-day delivery startup Shipt
Target on Wednesday announced that it will acquire Shipt, an Alabama-based same-day delivery startup, for $550 million in cash.
Bottom line: This is about playing defense against Amazon.
Target says that it expects to offer same-day delivery services at around half of its stores by early 2018 and at a majority of its stores by the 2018 holiday season. Full deployment across all major product categories would come by the end of 2019.
Shipt had raised around $65 million in venture capital funding from firms like Greycroft Partners, e.ventures, and Harbert Venture Partners. The Birmingham, Ala.-based company currently has a network of more than 20,000 personal shoppers in 72 markets, and will continue to run independently.
Some additional color from Ian Sigalow, a Greycroft partner and Shipt director:
- Target CEO Brian Cornell flew down to Birmingham and did a test drive with a Shipt delivery person.
- Expect Target to particularly leverage Shipt when it comes to fresh food offerings, as Shipt currently focuses on grocery.
- The original conversations between Target and Shipt were about a business partnership.
[Note: Greycroft Partners is an investor in Axios]