Target, which already owns on-demand delivery service Shipt, is in the process of acquiring technology assets from same-day delivery service Deliv. The retailer is characterizing the deal as more of an R&D type of acquisition and not one that will have an immediate consumer-facing impact. Deal terms were not disclosed, but we understand the deal price is nowhere near Shipt’s $550M ballpark, as it’s not an outright acquisition of Deliv’s business.
Deliv had raised over $80 million in venture capital funding, according to Crunchbase. The acquisition price is said to be immaterial to Target, which isn’t issuing a press release or an 8-K filing to note.
NBC News first reported the news about Target’s plans to acquire Deliv’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,” a Deliv spokesperson told TechCrunch. “Target is not involved in the wind-down. We are working with our retail partners to transition delivery services to other providers during the next 90 days.”
The deal is expected to close in around a month. Target is also making offers to some of Deliv’s staff, including founder and CEO Daphne Carmeli. The company tells TechCrunch that employees are being given 2 months of pay and options to sustain healthcare. Operations will wind down over a 90-day period, so some team members will remain employed over the next 2-3 months while they look for their next job. Drivers will also continue deliveries during this time, but will have time to pursue other opportunities, Deliv says.
Target already had some exposure to Deliv’s technology, as it had been working with the delivery service provider in small tests in 2019 and early 2020. The retailer believes there’s long-term potential with regard to Deliv’s technology, which smartly batches orders together that are going to the same area — something that its prior acquisitions of Shipt and Grand Junction in 2017 didn’t offer.
However, Target isn’t planning to integrate Deliv technology immediately into any of operations, but will instead research and test how it could aid its supply chain at scale. Target isn’t talking about what sort of orders or tests it may run following the deal’s closure, but believes the tech could be used in a range of ways to make deliveries more efficient.
The news of Target’s acquisition comes just one day after The Wall Street Journal reported Deliv would be ceasing its on-demand delivery operations on or before August 4.
Founded in 2012, Deliv had been operating a same-day delivery service for things like groceries and prescriptions in 35 markets. It had partnerships in place with companies like Best Buy, Walgreens and Macy’s, but those will not remain intact.
Deliv previously had a partnership with Walmart, but that ended in February 2019. At the time, Deliv said the Walmart partnership did not make up a large chunk of its operations.
The deal marks Target’s second acquisition in the delivery space. In December 2017, Target bought same-day delivery service Shipt for $550 million. Since then, Target has launched a dedicated shopping site for same-delivery service, powered by Shipt. But as of late, Target has been under fire for its practices toward Shipt workers, especially during the COVID-19 pandemic. In early April, Shipt shoppers walked off work to demand an extended sick pay policy, hazard pay and personal protective equipment.
Written by Megan Rose Dickey
This news first appeared on https://techcrunch.com/2020/05/07/target-is-looking-to-buy-delivs-same-day-delivery-tech/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Techcrunch+%28TechCrunch%29 under the title “
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