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Ex-Amazon and Zulily supply chain vets raise $2M for Seattle e-commerce logistics startup Shipium

New funding: Shipium landed a $2 million seed round led by PSL Ventures, the venture arm of Seattle startup studio Pioneer Square Labs, GeekWire has learned. The 4-person company is staying quiet about what exactly it is building, but an interview with co-founders Jason Murray and Mac Brown — and their previous work at Amazon and Zulily — reveals more.

Founder background: Murray spent nearly two decades at Amazon, most recently running supply chain teams and overseeing thousands of employees as a vice president. Brown is also an early Amazon employee — the co-founders started three days apart from each other in 1999 — and later joined Zulily, where he was vice president of supply chain and fulfillment software for the Seattle online retailer.

Murray and Brown are experts when it comes to fast shipping. They know that outside of giant retailers such as Amazon, most e-commerce brands don’t have the same capability to offer that perk to their customers.

Enter Shipium, which aims to make two-day fulfillment possible for any online retailer.

Target market: “It’s pretty simple: anyone who is in e-commerce that isn’t Amazon,” Murray said, when asked about Shipium’s potential clients. The startup is working with pilot customers in the direct-to-consumer fashion apparel segment, and is also in talks with a larger consumer electronics company.

Murray declined to provide details about how Shipium works with retailers — does the startup simply offer software? Do they own warehouse space? Are they facilitating the entire supply chain process? For now, the company describes its product as “supply chain optimization and data processing as a service.” Its products include delivery experience APIs; fulfillment network performance; customer delivery dashboards; and shipping insights.

Here’s more from the company’s website:

“We live in a world of degrees — you don’t have to choose between expensive fast shipping or inexpensive slow shipping. A middle ground exists enabling you to provide a faster shipping experience than you are offering today, but without cutting into your margin to do it. Some companies we work with are focused on faster delivery experience at their current cost and others are focused on maintaining their current shipping performance but at a lower cost. Our technology enables you to make better trade-offs between speed and cost and — above all — deliver on the promises you make to your customers.”

There are similar startups attacking the same problem — for example, Seattle startup Flexe provides companies with “pop-up” storage space, matching online retailers with warehouses that have excess capacity.

But Murray said given Shipium’s “unique approach,” there isn’t a direct competitor on the market. “We are all about improving sales conversions through shipping fees, and reducing shipping cost for our partners,” he said.

E-commerce trends: The timing for something like Shipium certainly seems ripe. Online shopping on Cyber Monday hit a record $9.4 billion, according to Adobe’s analytics arm, a 19 percent bump over last year.

Since Nov. 1, consumers have spent more than $81.5 billion on holiday shopping online, up 14 percent over last year’s pace. For the full year, Adobe expects holiday spending to reach $143.8 billion, up from $126 billion last year.

Meanwhile, Amazon has set expectations for 2-day shipping, leaving other retailers scrambling to keep up — or face the possibility of losing business. A recent UPS report found that 43 percent of consumers consider delivery costs as an “important factor” when buying products online. A Pitney Bowes 2018 e-commerce study found that half of U.S. retail customers now expect 2-day shipping.

“Consumers have come to really expect a certain level of service on the supply chain side — that’s where we are excited about being able to help a lot of other brands do an excellent job with fulfillment,” Brown said.

Murray added that there are also tons of unique products offered to different market segments.

“We want to make sure the product is not encumbered by bad logistics,” he said. “We’re trying to offer a logistics solution that gives retailers an even playing field.”

Investor perspective: “Retailers of all sizes face overwhelming supply chain challenges in the age of Amazon,” Julie Sandler, managing director at PSL Ventures and Pioneer Square Labs, said in a statement. “Shipium offers unique and powerful leverage for e-commerce companies all over the country, and we frankly cannot imagine two founders on the planet better positioned to scale such an audacious vision to retailers everywhere.”

Source: Geek Wire

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