Target in talks to boost its same-day delivery ambitions by buying pieces of startup Deliv

Target is adding to its same-day delivery corps.

The retailer is in the process of buying technology assets from the same-day delivery service Deliv, the startup said Thursday. The move comes as Target looks to bolster its same-day delivery options 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 provided 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 team will be moving over to Target. Target is not involved in the wind-down,” Deliv said in a statment.

Other major retailers have turned speedy delivery into something consumers increasingly expect. Amazon offers same-day delivery on up to 3 million items, as well as Whole Foods and Amazon Fresh grocery orders. Walmart has also sped up service with next-day delivery in select markets.

While Target and its competitors are looking to speed up deliveries during the coronavirus pandemic, Deliv’s technology won’t be rolled 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 interests 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 discuss it.

Target considered acquiring the entire company at one point but decided to buy parts of it after determining it wasn’t profitable, the source said. It found investors weren’t willing to put any more money into Deliv, and even during the pandemic, when shipping has surged, Deliv failed to reach profitability.

As part of the deal, Target is also hiring Deliv CEO Daphne Carmeli and a number of Deliv’s employees.

Deliv was based out of Menlo Park, California, and was founded in 2012. It raised $80.4 million in five rounds 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, according 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 delivery workers announcing the shutdown and noting the service’s last day would be Aug. 4. Until then, Deliv will continue to operate as usual.

Target isn’t buying the company, just its technology. As a result, partnerships Deliv had with companies such as Best Buy, Macy’s and Walgreens won’t continue once it’s shut down.

This is Target’s second notable acquisition targeted at fast delivery.

In December 2017, Target acquired Shipt, an online same-day delivery platform, for $550 million. The deal gave Target access to Shipt’s proprietary tech platform and its network of more than 20,000 personal shoppers.

Although Shipt is owned by Target, it still operates as an independent company. It also handles a different part of the logistics process than Deliv, which provides technology for grouping deliveries in the last-mile of shipping.

source: nbcnews.com