Tag: e-commerce

Posted on

Alibaba reportedly near finalizing a deal to acquire NetEase’s cross-border e-commerce unit

After weeks of media reports, Alibaba may finally be nearing an agreement to acquire NetEase’s cross-border e-commerce unit, Kaola. Chinese tech news website 36kr reports that a deal may be announced as early as this week and is expected to be worth $2 billion in cash and shares.

Kaola will continue to run independently, but would become part of Alibaba’s Tmall Global, creating a massive cross-border e-commerce business. At the end of last year, Tmall Global held a 31.7% share of the market, while Kaola had about 24.5%, much larger than rivals JD Worldwide (11.5%), VIP International (9.7%), Amazon (6%).

Caixin Global first reported that Alibaba was planning to acquire Kaola for $2 billion in cash on August 15, but then the deal was reportedly called off after the companies disagreed on the price and other details.

36kr reports that Kaola employee stock options will be converted into Alibaba shares and that even though the brand will remain independent, Alibaba will put a new CEO in place, replacing current Kaola head Zhang Lei.

An Alibaba spokesperson said the company does not comment on market rumors. NetEase had no comment.

Alibaba is also expected to invest in NetEast Cloud Music, but that deal is unrelated to the Kaola acquisition.

Posted on

Africa Roundup: Goldman backs Kobo360, Rwanda commits to EVs, Interswitch IPO update

Nigerian freight logistics startup Kobo360 raised a $20 million Series A round led by Goldman Sachs and $10 million in working capital financing from Nigerian commercial banks.

The company — with an Uber-like app that connects truckers and companies to delivery services — will use the funds to upgrade its platform and expand to 10 new countries beyond current operating markets of Nigeria, Togo, Ghana and Kenya.

Kobo360 looks to grow beyond its Nigeria roots to become a truly Pan-African company, co-founder Obi Ozor told TechCrunch .  He co-founded the venture in 2017 with fellow Nigerian Ife Oyedele II.

Since its launch in Lagos, the startup has continued to grow its product offerings, VC backing and customer base. Kobo360 claims a fleet of more than 10,000 drivers and trucks operating on its app. Top clients include Honeywell, Olam, Unilever, Dangote and DHL.

Kobo360’s latest round is also notable for Goldman Sachs’ involvement. Goldman’s participation tracks a growing list of African venture investments made by the U.S. based finance firm.

Nigerian logistics startup Kobo360 raises $30M backed by Goldman Sachs

Chinese mobile-phone and device maker Transsion will list in an IPO on Shanghai’s STAR Market, Transsion confirmed to TechCrunch.

The company — which has a robust Africa sales network — could raise up to 3 billion yuan (or $426 million).

Transsion’s IPO prospectus is downloadable (in Chinese) and its STAR Market listing application available on the Shanghai Stock Exchange’s website.

STAR is the Shanghai Stock Exchange’s new Nasdaq-style board for tech stocks that also went live in July with some 25 companies going public.

Headquartered in Shenzhen — where African e-commerce unicorn Jumia also has a logistics supply-chain facility — Transsion is a top-seller of smartphones in Africa under its Tecno brand.

The company has a manufacturing facility in Ethiopia and recently expanded its presence in India.

Transsion plans to spend the bulk of its STAR Market raise (1.6 billion yuan or $227 million) on building more phone assembly hubs and around 430 million yuan ($62 million) on research and development, including a mobile phone R&D center in Shanghai, a company spokesperson said.

Africa’s top mobile phone seller Transsion to list in Chinese IPO

The government of Rwanda will soon issue national policy guidelines to eliminate gas motorcycles in its taxi sector in favor of e-motos, according to a preview of the plan by President Paul Kagame at a public-rally

The director general for the Rwanda Utilities Regulatory Authority, Patrick Nyirishema, confirmed Kagame’s comments were ahead of a national e-mobility plan in the works for the East African nation.

“The president’s announcement is exactly the policy direction we’re in…it’s about converting to electric motos…The policy is prepared, it’s yet to be passed…and is going through the approval process,” Nyirishema told TechCrunch on a call from Kigali.

Motorcycle taxis in Rwanda are a common mode of transit, with estimates of 20 to 30 thousand operating in the capital of Kigali.

Nyirishema explained that converting to e-motorcycles is part of a national strategy to move Rwanda’s entire mobility space to electric. The country will start with public transit operators, such as moto-taxis, and move to buses and automobiles.

Ampersand Africa e motorcycle

Ampersand, a Kigali-based e-moto startup, has already begun to pilot EVs and charging systems in Rwanda and will work with the country’s government on the moto-taxi conversion.

In an ExtraCrunch feature, TechCrunch delved into tech talent accelerator Andela — one of the most recognized and well funded startups operating in Africa.

In a byte, Andela is Series D stage startup ― backed by $180 million in VC ― that trains and connects African software developers to global companies for a fee.

CEO Jeremy Johnson dished on the company’s strategy toward profitability and responded to some of the criticism it receives ― namely a claim the startup is creating a second brain-drain when software developers leave Andela and Africa, to take positions with global companies.

Today Andela has offices in New York and five African countries: Nigeria, Kenya,  Rwanda, Uganda, and Egypt ― which largely align with the continent’s top tech VC markets.

Across this network the company recruits software developers, builds software engineers, and deploys teams of software engineers.

Johnson disclosed numbers on Andela’s expected new hires for the year, current developer staff, how many departures the company expects, and how many of those will likely leave their home countries―which actually amounts to a fairly small percentage.

What is Andela, the Africa tech talent accelerator?

TechCrunch checked in with Nigerian fintech company Interswitch for the latest on its anticipated dual-listing London and Lagos stock exchanges.

A Bloomberg News story (based on background sourcing) revived speculation the IPO could happen this year for the company — which provides much of Nigeria’s digital banking infrastructure and has expanded its operations presence and payments products across Africa and globally.

Reports that Interswitch could be one of the earliest big tech companies out of Africa to go public trace back to 2016, when CEO and founder Mitchell Elegbe told TechCrunch the company was considering a listing before the end of that year.

Last month, an Interswitch spokesperson would neither confirm or deny a pending IPO, per a TechCrunch inquiry. So, it’s still tough to say if or when the company could list. But there are still several reasons why the business (and its possible IPO) are worth keeping an eye on, which we detailed in the update story.

Update on Nigerian fintech firm Interswitch and its speculative IPO

 

One could be an eventual increase in venture funding to African startups, that could come from Interswitch. Another could be an Interswitch IPO adding another benchmark for global investors to gauge Africa’s tech sector beyond Jumia — the e-commerce company that became the first big tech firm operating in Africa to launch on a major exchange, the NYSE in April.

More Africa-related stories @TechCrunch

African tech around the ‘net

 

Posted on

Update on Nigerian fintech firm Interswitch and its speculative IPO

Nigerian fintech firm Interswitch has been circulating in business news around a possible IPO on the London Stock Exchange.

Last month Bloomberg News ran a story—based on unnamed sources—reporting the financial services firm had hired investment banks to go public on the LSE later in 2019. The piece spurred additional aggregated press.

That Interswitch—which provides much of Nigeria’s digital banking infrastructure—could become one of Africa’s earliest tech companies to list on a global exchange isn’t exactly news.

It’s more deja vu of a story that began several years ago.

As TechCrunch reported, Interswitch was poised to launch on the LSE in 2016. CEO and founder Mitchell Elegbe confirmed “a dual-listing on the London and Lagos stock exchange is an option on the table,” in a January 2016 call.

Two additional sources wired into Nigeria’s tech market and close to Interswitch’s investors also said the public launch would happen by the end of that year.

The IPO would have made Interswitch Africa’s first tech company to go from startup to a billion-dollar plus unicorn valuation status. Of course, it didn’t happen in 2016.

In 2017, TechCrunch checked in with Interswitch on the delay and was told the company could not comment on its pending IPO.  In other public interviews, executives Mitchell Elegbe and Divisional Chief Executive Officer Akeem Lawal named Nigeria’s recession as a reason for the delay and reaffirmed a likely dual Longon-Lagos listing by the end of 2019.

Will Interswitch still be the company that brings Sub-Saharan Africa its big tech windfall?

After the latest round of IPO buzz, TechCrunch asked Interswitch this week about the Bloomberg reporting and an imminent public stock listing. ““Interswitch does not comment on market speculation,” was the only info a public spokesperson could offer.

So, its tough to say if or when the company could list. There are still a few reasons why the company (and its possible IPO) are worth keeping an eye on.

One is Interswitch’s growing role as a nexus for payments and financial services infrastructure in Nigeria (home of Africa’s largest economy), across Africa, and between Africa and the world. Back in 2002, the company became the pioneer for creating infrastructure to digitize Nigeria’s then predominantly paper-ledger and cash-is-king based economy.

Interswitch QuicktellerInterswitch has since moved into high-volume personal and business finance, with its Verve payment cards and Quickteller payment app. The Nigerian company (which is now well beyond startup phase) has expanded with physical presence in Uganda, Gambia, and Kenya—the latter being home-turf of M-Pesa and Safaricom, which are largely responsible for making Kenya the mobile-money capital of Africa.

Interswitch also sells its products in 23 African countries, through bank partnerships, and has presence abroad. Through its Verve Global Card product, the company’s cardholders can now make payments in the U.S., UK, and UAE. Interswitch launched a partnership this month for Verve cardholders to make payments on Discover’s global network. The first transaction for the partnership was placed in New York, with an advertisement for the Nigerian company’s payment product flashing across Times Square. Verve Times Square Interswitch  Another facet to a possible Interswitch IPO is its potential to spark more corporate venture arm and acquisition activity in African fintech, which as a sector receives the bulk of the continent’s startup capital. Interswitch launched a venture arm in 2015—called its global ePayment Growth Fund—that made two investments, but then went largely quiet.

A windfall of IPO capital and increasing competition from fintech startups could spur Interswitch to fire up its venture investing activity again. Startups such as Flutterwave and TeamAPT (formed by a former Interswitch alum) have already entered some of Interswitch’s product territory. If a public listing led Interswitch to ramp up investing in (or even acquiring) startups, the net effect would be more capital and exits in Africa’s fintech sector.

Nigerian fintech firm TeamApt raises $5M, eyes global expansion

And finally, if Interswitch does IPO on the London and Lagos stock exchanges, it could provide another benchmark for global investors to gauge Africa’s tech sector beyond Jumia. This spring the e-commerce company became the first big tech firm operating in Africa to launch on a major exchange, the NYSE.

So far, Jumia’s IPO has been an up and down affair. The company gained investor and analyst confidence out of the gate, but also came under a short-sell assault and share-price volatility.

Two successful global IPOs of tech companies from Africa would and could become the best-case scenario for the continent’s startup scene. But for that to be a possibility, Interswitch will have to confirm the speculation and finally list as a publicly traded fintech firm.

Africa e-tailer Jumia issues post-IPO results amid short-sell assault

 

Posted on

Target’s Drive Up pickup service expands nationwide

Target’s same-day curbside pickup service, Drive Up, has now reached all 50 U.S. states, the retailer announced on Thursday. The service allows consumers to shop online then pull up to designated spaces at their local store to have their purchases ferried to their vehicle by Target staff.

Drive Up has rolled out to Target stores at a fairly fast pace, given the technology requirements, infrastructure and operational changes required to support these fast-to-fill online orders.

The company in April 2018 introduced Drive Up to its first locations outside of Target’s hometown market of Minneapolis-St. Paul, where it had been in piloting testing since October 2017. With the public launch, Drive Up was immediately available across nearly 270 stores in Florida, Texas and the Southeast. By summer 2018, it had reached over 800 stores, with plans to reach 1,000 by year-end.

Instead, it hit the 1,000-store milestone in October 2018.

And with the start of this year’s back-to-school shopping season, Drive Up became available at over 1,500 stores.

With the expansion announced today, Drive Up has now reached 1,750 stores, thanks to recent rollouts in Alaska, Hawaii, Washington, Oregon, Idaho, North Dakota, South Dakota, Montana, and Wyoming. As it launches in new locations, Target will often dole out free product samples as a perk for its first customers and to encourage repeat business.

Overall, Drive Up seems to be working to bring more consumers to its stores — even if they don’t come inside.

In less than two year’s time, Drive Up has become one of Target’s best-rated services. During its most recent earnings, Target noted that it had more than doubled the total number of Drive Up orders in 2018 by fulfilling nearly 5 million orders within the first part of this year alone.

The retailer also recently noted that roughly 1 in 5 customers placing a same-day order in Q2 were placing an order with Target for the first time.

The backend side of Drive Up has improved over time, as well, with improvements to optimize both order picking and delivery of curbside orders to customers.

At launch, Target was committing to fulfill Drive Up orders within 2 hours. Today, Target says it’s able to offer fulfillment by Drive Up in as soon as one hour.

By this holiday season, Target says that “most” of its 1,855 U.S. stores will offer Drive Up service.

“We’ve heard the message loud and clear from our guests: They absolutely love the ease and convenience of Drive Up, whether they’re shopping for household essentials, road trip snacks or baby gear,” said Dawn Block, senior vice president, digital, in a statement about the nationwide expansion. “So our team has worked hard to rapidly expand the service since its introduction less than two years ago to all 50 states. And the work’s not done. The team’s continuing to find ways to make the service even better.”

The service is not without competition, however.

Walmart Grocery offers curbside pickup at over 2,500 locations. Sam’s Club in July announced same-day pickup nationwide. Amazon, which has historically lacked a brick-and-mortar presence, has been quick to react to the threat of curbside pickup. Most recently, it announced a new partnership with Rite Aid, that will see the arrival of a “Counter” service — a free, in-store pickup option — at 1,500 Rite Aid locations by year-end. (Amazon also offers grocery pickup at select Whole Foods.)

However, in-store pickup isn’t quite as convenient as curbside service. And that’s especially true for curbside’s top demographic: parents — often those with young children. Among Target Drive Up’s best-sellers, for example, are things like diapers, wipes, and formula.

Drive Up is one of several ways Target is fighting back against Amazon. The company also now owns same-day delivery service Shipt, offers online order pickup, subscriptions to common household items, and runs a Prime Pantry competitor with next-day service, Target Restock. 

Posted on

Former Google X ecec Mo Gawdat wants to reinvent consumerism

Mo Gawdat, the former Google and Google X executive, is probably best known for his book Solve for Happy: Engineer Your Path to Joy. He left Google X last year. Quite a bit has been written about the events that led to him leaving Google, including the tragic death of his son. While happiness is still very much at the forefront of what he’s doing, he’s also now thinking about his next startup: T0day.

To talk about T0day, I sat down with the Egypt-born Gawdat at the Digital Frontrunners event in Copenhagen, where he gave one of the keynote presentations. Gawdat is currently based in London. He has adopted a minimalist lifestyle, with no more than a suitcase and a carry-on full of things. Unlike many of the Silicon Valley elite that have recently adopted a kind of performative aestheticism, Gawdat’s commitment to minimalism feels genuine — and it also informs his new startup.

07 28 19 Frontrunner 38“In my current business, I’m building a startup that is all about reinventing consumerism,” he told me. “The problem with retail and consumerism is it’s never been disrupted. E-commerce, even though we think is a massive revolution, it’s just an evolution and it’s still tiny as a fraction of all we buy. It was built for the Silicon Valley mentality of disruption, if you want, while actually, what you need is cooperation. There are so many successful players out there, so many efficient supply chains. We want the traditional retailers to be successful and continue to make money — even make more money.”

What T0day wants to be is a platform that integrates all of the players in the retail ecosystem. That kind of platform, Gawdat argues, never existed before, “because there was never a platform player.”

That sounds like an efficient marketplace for moving goods, but in Gawdat’s imagination, it is also a way to do good for the planet. Most of the fuel burned today isn’t for moving people, he argues, but goods. A lot of the food we buy goes to waste (together with all of the resources it took to grow and ship it) and single-use plastic remains a scourge.

How does T0day fix that? Gawdat argues that today’s e-commerce is nothing but a digital rendering of the same window shopping people have done for ages. “You have to reimagine what it’s like to consume,” he said.

The reimagined way to consume is essentially just-in-time shipping for food and other consumer goods, based on efficient supply chains that outsmart today’s hub and spoke distribution centers and can deliver anything to you in half an hour. If everything you need to cook a meal arrives 15 minutes before you want to start cooking, you only need to order the items you need at that given time and instead of a plastic container, it could come a paper bag. “If I have the right robotics and the right autonomous movements — not just self-driving cars, because self-driving cars are a bit far away — but the right autonomous movements within the enterprise space of the warehouse, I could literally give it to you with the predictability of five minutes within half an hour,” he explained. “If you get everything you need within half an hour, why would you need to buy seven apples? You would buy three.”

Some companies, including the likes of Uber, are obviously building some of the logistics networks that will enable this kind of immediate drop shipping, but Gawdat doesn’t think Uber is the right company for this. “This is going to sound a little spiritual. There is what you do and there is the intention behind why you do it,” he said. “You can do the exact same thing with a different intention and get a very different result.”

That’s an ambitious project, but Gawdat argues that it can be done without using massive amounts of resources. Indeed, he argues that one of the problems with Google X, and especially big moonshot projects like Loon and self-driving cars, was that they weren’t really resource-constrained. “Some things took longer than they should have,” he said. “But I don’t criticize what they did at all. Take the example of Loon and Facebook. Loon took longer than it should have. In my view, it was basically because of an abundance of resources and sometimes innovation requires a shoestring. That’s my only criticism.”

T0day, which Gawdat hasn’t really talked about publicly in the past, is currently self-funded. A lot of people are advising him to raise money for it. “We’re getting a lot of advice that we shouldn’t self-fund,” he said, but he also believes that the company will need some strategic powerhouses on its side, maybe retailers or companies that have already invested in other components of the overall platform.

T0day’s ambitions are massive, but Gawdat thinks that his team can get the basic elements right, be that the fulfillment center design or the routing algorithms and the optimization engines that power it all. He isn’t ready to talk about those, though. What he does think is that T0day won’t be the interface for these services. It’ll be the back end and allow others to build on top. And because his previous jobs have allowed him to live a comfortable life, he isn’t all that worried about margins either, and would actually be happy if others adopted his idea, thereby reducing waste.

Posted on

Instacart CFO Ravi Gupta to exit for Sequoia Capital

Instacart‘s chief financial officer and chief operating officer, Ravi Gupta, will exit the on-demand grocery delivery company at the end of the year to “return to his investing roots,” the company told TechCrunch this morning. The executive will join Sequoia Capital as a partner on the growth team beginning in January.

The company’s vice president of finance and strategy, Sagar Sanghvi, has been promoted to CFO, a critical role as the company gears up for an initial public offering as soon as next year. Instacart is actively searching for a COO replacement.

Valued at nearly $8 billion, Instacart has raised a total of $1.9 billion in venture capital funding since it was founded in 2012. Co-founder and CEO Apoorva Mehta has remained mum on any details surrounding the company’s IPO plans, telling TechCrunch last fall that a float “will be on the horizon.”

Sagar Sanghvi CFO Instacart

Instacart’s vice president of finance and strategy, Sagar Sanghvi, has been promoted to CFO.

After a decade at the investment firm KKR, Gupta joined Instacart in 2015 to manage both the company’s finances and operations as its first CFO and COO. He’s worked closely with Sequoia for some time; the firm first invested in Instacart prior to Gupta’s hiring, leading an $8.5 million Series A financing in 2013. Sequoia’s outspoken partner Michael Moritz sits on the company’s board of directors.

Roelof Botha, another Sequoia partner, says the venture capital firm helped San Francisco-based Instacart recruit Gupta to the C-suite years ago: “With Ravi now returning to his passion of investing, he can help other visionaries – like Apoorva – turn their dreams into reality,” Botha said in an emailed statement. “Ravi’s operational and investing experience, along with his strong work ethic and humility, will make him an invaluable partner to founders and our team.”

When Gupta joined Instacart to oversee finance, corporate development and strategic business initiatives in what was a newly created role, the business, a newly minted “unicorn,” had only 300 employees. Today, Instacart has roughly 1,000 full-time employees and another 100,000 “shoppers,” or contract workers who fulfill the online grocery orders.

“In 2015, I met Apoorva and he shared his vision for Instacart with me,” Gupta said in an emailed statement. “I was truly inspired and knew this was a team I wanted to join and a company I wanted to help build.”

Following his departure, Gupta will continue to advise Instacart on a variety of matters, the company said.

Instacart is announcing another two high-level hires this morning. Jakii Chu has joined the company as its chief marketing officer after nearly five years at sports merchandising business Fanatics, where she was senior vice president of e-commerce.

Chris Rogers, the former managing director of Apple Canada, has been hired as its vice president of retail. Rogers will be based in Instacart’s Toronto office, which Instacart opened earlier this year, reporting to chief business officer Nilam Ganenthiran.

Instacart delivers groceries to 5,500 cities across the U.S. and Canada, making deliveries from some 20,000 stores. Earlier this year, Instacart began its expansion into alcohol delivery. The service is now available in 20 states.

A graduate of Y Combinator, Instacart is also backed by D1 Capital Partners, Coatue Management, Thrive Capital, Canaan Partners, Andreessen Horowitz and several others.

Instacart CEO apologizes for tipping debacle

Posted on

Ron Johnson’s e-commerce startup Enjoy raises $150M, expands in U.K.

Enjoy, the e-commerce startup led by former Apple VP of retail operations, Ron Johnson, has raised an additional $150 million in Series C funding from L Catterton’s new consumer technology platform, LCH Partners. The funds will be used to fuel Enjoy’s U.K. expansion and other international growth. The startup is also today launching a partnership with British mobile network operator EE, which will allow the company to serve over 80% of U.K. households by 2020.

The company announced the funding but not the size of the round. An SEC filing shows $150 million was offered, but only half had closed. However, a source familiar with the round confirmed $150 million had been raised.

The new growth funding brings Enjoy’s total raise to date to $350 million, following its May 2015 launch. Prior investors include Riverwood Capital, Stamos Capital, Kleiner Perkins, Highland Capital, and Oak Capital Management.

Having spent over a decade at Apple, Johnson is best known for pioneering the concept of Apple’s retail stores and Genius Bar. He previously held an executive position at Target as VP of Merchandising and, following Apple, had a less successful run as J.C. Penney’s CEO which led to his ouster. (Though in hindsight, it’s been argued that J.C. Penney should have just stuck with his plan, after all.)

With Silicon Valley-based Enjoy, Johnson combined the convenience of online shopping with the personal service that comes from shopping in a physical, brick-and-mortar store and the help you’d receive at Genius Bar, for example.

As Johnson explained around the time of launch, the goal was to figure out how to provide personal service to those who want to buy online.

“One of the observations from my time at Apple is that Apple makes the easiest to use products on the planet, but look at how busy the stores are with people asking questions and needing help. So what about the rest? How do you deliver help in this digital world we live in?,” he said, during an interview at TechCrunch Disrupt 2015.

Through partnerships with other companies, including AT&T, Sonos, Google, and now EE, Enjoy creates an online mobile store where customers can shop for devices and receive same-day delivery. They can also opt to have an Enjoy expert deliver the item and help them get set up free of charge.

“One of the highlights of my retail career was creating a new channel for Apple customers, which was the Apple Retail Store,” said Ron Johnson, CEO and Co-Founder of Enjoy, in a statement. “Now I get to do it again by creating the mobile retail store for not just one company, but for many great companies around the world. As we look to drive the next phase of our growth, L Catterton was a natural choice as our partner, given their expertise in building consumer and technology brands on a global scale,” he said.

Including today’s expansion by way of its EE partnership, Enjoy now operates in more than 54 U.S. markets and covers more than 50% of the U.S. population, and will be offered in 11 U.K. markets, covering more than 60% of the population, by year-end. As of 2020, it will reach 80% of the U.K. population.

The company also plans to expand to at least one other country this year, and additional countries in 2020.

Posted on

Axonius, a cybersecurity asset management startup, raises $20M in Series B

Cybersecurity asset management startup Axonius has raised $20 million in its second round of funding this year.

Venture capital firm OpenView led the Series B, joining existing investors in bringing $37 million to date following the startup’s $13 million Series A in February.

The security startup, founded in 2017, helps companies keep track of their enterprise assets, such as how many clouds, computers and devices are on their network. The logic goes that if you know what you have — including devices plugged into your network by employees or guests — you can keep track and discover holes in your enterprise security. That insight allows enterprises to enforce security policies to keep the rest of the network safe — like installing endpoint security software, or blocking devices from connecting to the network altogether.

Axonius’ co-founder and chief executive Dean Sysman said the company takes a different approach to asset management.

“You can’t secure what you don’t know about,” he told TechCrunch. “Almost everything you’re doing in security relies on a foundation of knowing your assets and how they stack up against your security policies. Once you get that foundation taken care of, everything else you do will benefit,” he said.

Instead, Axonius integrates with over a hundred existing security and management solutions to build up a detailed picture of an entire organization.

Clearly it’s a strategy that’s paying off.

The company already has big-name clients like The New York Times and Schneider Electric, as well as a handful of customers in the Fortune 500.

Sysman said the bulk of the funding will go towards the expansion of its sales and marketing teams but also the continued improvement and development of its product. “We’re hitting the gas and continuing to bring our solution to as many organizations in the market as we can,” he said.

Axonius said OpenView partner Mackey Craven, who focuses on cloud computing and enterprise infrastructure companies, will join the board of directors following the fundraise.

Posted on

Target’s same-day pickup and delivery services growing at double the rate of 2018

Target’s investment in same-day pickup and delivery options is paying off. The company, which today offers same-day in-store pickup, drive-up, and same-day delivery through its acquisition of Shipt, said this week that these services combined have more than doubled their sales in the last year. In addition, they accounted for more than a third of Target’s digital sales, up from about 20% last year.

“These options offer speed, convenience and reliability and as a result, they are quickly becoming the preferred fulfillment choices for our guests,” said Target CEO Brian Cornell, speaking to investors about Target’s Q2 earnings. “And most importantly, because these options leverage our store infrastructure, technology, and teams, same-day fulfillment delivers outstanding financial performance as well,” he added. 

What’s notable about the same-day sales is that they’re bringing in guests to Target, who had never before placed digital orders with the retailer.

Roughly 1 in 5 customers placing a same-day order in the second quarter were placing an order with Target for the first time.

And once Target customers become familiar with the process, they seem to return in short order. During Q2, more than three-quarters of the same-day orders were placed by guests who had used same-day fulfillment in the past three months.

Target’s ability to grow its same-day sales in this fashion was the result of investment in infrastructure, technology, and even its brick-and-mortar stores themselves.

Glenview Order Pickup Entrance Exterior

On the technology front, Target says its pickup and delivery services benefitted from increased order picking efficiency. Instead of using a first-in, first-out (FIFO) system, new algorithms are being used to prioritize the sequence of order picking that helps direct store employees on which work to do first as well as the best box size for packing orders.

The technology also helps to optimize the path for order picking to minimize the number of steps between the sales floor and back room.

Target claims that since the beginning of last year, these improvements have led to an over 30% increase in order picking for drive-up and pickup services. Its ship-from-store capability also improved over 30% during that time.

Meanwhile, the retailer’s $7+ billion remodeling project announced in 2017 was focused more than just updating the stores’ look-and-feel and merchandising displays. The new format stores also include changes designed to cater to online shoppers who come inside the store for their order pickups, by adding more space for things like Order Pickup.

Outside, space is added for Drive Up customers who shop online then later drive to the store for curbside service.

This summer, Target passed its 500th store remodel, and says it’s on-track to remodel 1,000 stores by the end of 2020. It also plans to open up more small-format stores — about a third of the size of a traditional Target, or on average, 40,000 sq ft — in big cities, suburbs, and college campuses.

Target says it plans on opening 30 more small-format stores per year, as it has done last year and the year prior. It said on Friday it had opened its 100th small-format store.

Richmond Drive Up

All the changes to make Target’s stores more of home for order fulfillment has helped the retailer reduce costs, as well, the company pointed out this week on its Q2 earnings.

Target says, as it’s shifted away from upstream distribution centers for order fulfillment to its stores, costs went down by more than 40%. And costs related to same-day services went down by 90%. Target today has 1,855 U.S. stores, which is how it’s able to make this store-centric strategy work.

Many traditional big-box retailers are struggling under the weight of competition from Amazon — Macy’s, Kohl’s and J.C. Penney’s all released disappointing earnings this week, for example.

Target’s earnings, however, beat every estimate this week, sending shares to a record high.

The company reported $18.42 billion in revenue, above the $18.34 billion expected. Profits were up 17% to $938 million ($1.82 a share) compared with $799 million ($1.49 a share), a year ago.

Second-quarter comparable sales grew 3.4 percent, with same-day fulfillment accounts for nearly 1.5 percentage points of that. Over the past two years, comparable sales have grown 10%, Target said.

 

Posted on

AmazonFresh expands to three key markets: Houston, Minneapolis, and Phoenix.

AmazonFresh, one of two main grocery delivery services Amazon today operates, is expanding to new markets, the retailer announced this morning. The service will now be available to Prime members in Houston, Minneapolis, and Phoenix. Notably, this list includes a test market for Walmart’s new grocery subscription service, Delivery Unlimited; Target’s corporate headquarters; and an early test market for Walmart’s online grocery business, respectively.

Members in these cities will have access to tens of thousands of grocery items, including fresh fruits and produce, meat, seafood, and other everyday essentials, all of which can be delivered for free in two hours. Free delivery requires a $35 minimum order, or a $9.99 delivery fee will apply if the order totals less than $35.

Meanwhile, a faster, 1-hour delivery option is also available for an additional $7.99 fee.

With the launch, AmazonFresh is available in Las Vegas, Atlanta, Baltimore, Boston, Chicago, Dallas, Denver, Los Angeles, Miami, New York, Philadelphia, San Diego, San Francisco, Seattle, and Washington, D.C.

“We’re thrilled to introduce AmazonFresh to Prime members in Houston, Minneapolis and Phoenix,” said Stephenie Landry, Vice President of AmazonFresh and Prime Now, in a statement. “Prime members tell us they want their stuff even faster. We’re happy to deliver on that ask and can’t wait for customers in Houston, Minneapolis and Phoenix to take advantage of one- and two-hour delivery from AmazonFresh,” she added.

Amazon’s strategy with online grocery is a bit mixed. Today, Prime members can opt for deliveries through Prime Now, which delivers from Whole Foods markets as well as Amazon fulfillment centers, and in some areas, from local grocers. Prime Now is covered in the cost of an Amazon Prime subscription, while AmazonFresh requires an additional $14.99 per month additional fee.

It’s not clear why someone would choose AmazonFresh over Prime Now —  if both were available — given the cost. The only reason may be that AmazonFresh offers a better selection in some markets. But consumers aren’t only choosing between these two options. They can also shop from Walmart’s online grocery, Instacart, Shipt, and others.

Amazon recently pushed back against an industry report that claimed AmazonFresh was struggling. The retailer argued that it’s still investing in the service, expanding it to new markets, and pointed out that it never exited entire markets — it only pulled back in some zip codes. That said, AmazonFresh has grown far slower than Prime Now, with availability in 18 markets as of this news, versus Prime Now’s nearly 100.

In addition to the convenience of shopping online or in the app, AmazonFresh also works with Alexa. Customers can say things like “Alexa, order milk from Fresh,” and Alexa will add a choice for milk to their shopping cart.