With $40 million in new investments announced last week, Chicago-based e-commerce logistics company ShipBob is eyeing an expansion, starting with a new fulfillment warehouse and a push to hire 100 people in the next year.
The startup aims to help small-to-midsize e-commerce companies ship their products at speeds similar to Amazon. Shipping logistics tends to be the hardest part of launching an e-commerce brand, said Dhruv Saxena, ShipBob’s co-founder and CEO.
“The expectation from a customer standpoint is that they will get all of their e-commerce orders delivered to them like Amazon Prime: same-day, next-day,” he said. “These e-commerce businesses don’t have the infrastructure to support that customer expectation.”
ShipBob plans to use its $40 million round of funding to continue working toward that capability and improve its software platform. Its new facility in suburban Cicero, Ill., is six times larger than the company’s previous Chicago-area warehouse. It can facilitate same-day delivery for Chicago-area customers ordering products from e-commerce platform Shopify.
There is room in the e-commerce fulfillment world for a company besides Amazon, said Sunil Chopra, a professor at Northwestern University’s Kellogg School of Management. To compete with the tech giant and other players, ShipBob will need to take advantage of its scale to lower the cost of its services for customers.
In about a year, ShipBob grew to more than 350 employees from 60. Besides the Cicero warehouse, the company operates fulfillment centers in Los Angeles, San Francisco, New York and Dallas.
ShipBob plans to open more in the next few years, and their locations will depend on shipping demand, Saxena said.