UPS Invests in Same-Day Delivery Service Shutl Ahead of U.S. Launch
London-based Shutl, which aims to build a fast delivery service, has received $2 million from one of the biggest logistics companies of them all: UPS.
Shutl says it plans to use the cash to expand its engineering team, sign up new retail partners and prepare to launch in the U.S. early next year. In addition to the UPS Strategic Enterprise Fund, investors in the round included Hummingbird Ventures and GeoPost.
The demand to get online purchases to a consumer’s door faster has been around for a long time.
Just today, Amazon announced that more items are shipped now using its Prime Two-Day Shipping service, which it launched in 2005, than with its Free Super Saver Offer. Amazon charges $79 a year for the Prime subscription service, which also includes free streaming videos and book rentals. It does not disclose how many of its customers are subscribers.
Through partnerships with retailers, Shutl will be offering 90-minute delivery windows, or the option of picking a one-hour window of your choice on the same day, or any day.
In August, eBay began testing a same-day delivery service, quietly sending out invitations to San Francisco residents. And other retailers are trying to solve the problem of getting packages to consumers more efficiently by building out a network of lockers. BufferBox is the most recent example, but there’s also ShopRunner, which combines two-day shipping with its own locker service. And in Europe, Kiala was recently snapped up by UPS.
Amazon is also building out a locker network, but it downplayed the idea of same-day shipping in July, when it said it had not found a way to do it economically.
“Since launching in 2010, we’ve focused on providing a service that blows away shoppers’ expectations,” said Tom Allason, Shutl’s founder and CEO, whom the Financial Times described as the quintessential start-up guy after seeing the 31-year-old college dropout recently wearing torn jeans and flip-flops.
“We’ve spent this last year taking Shutl national across the U.K.; now we are ready for the U.S., a market that we estimate will be worth around $26 billion by 2016,” Allason added. He is already claiming that the company’s revenue will reach the seven-digit mark this year.
Of course, delivery services have been well-tested and have failed — most notably, the dot-com bomb Kozmo.com, which promised free one-hour delivery. At least this time around, companies are charging for it.