As reported by Natilie Wong, Bloomberg.com
Shopify, the shopping technology developer that’s quickly becoming the anti-Amazon, has taken another step up the sales supply chain with its $450 million acquisition of the warehouse automation and management technology developer, 6 River Systems.
The acquisition will serve to boost efficiencies among Shopify’s Fulfillment Network service, which launched in June.
The acquisition gives Shopify access to the robotics experts who helped develop Amazon’s own robotics business when they were at Kiva Systems (before Amazon acquired that company).
“Shopify is taking on fulfillment the same way we’ve approached other commerce challenges, by bringing together the best technology to help everyone compete,” said Tobi Lütke, CEO of Shopify, in a statement. “With 6 River Systems, we will bring technology and operational efficiencies to companies of all sizes around the world.”
The deal, which was approved by 6 Rivers’ investors, including Menlo Ventures, Norwest Venture Partners and Eclipse Partners, was a mix of cash and stock totaling $450 million, with around $69 million worth of Shopify Class A shares set aside for 6 River Systems’ employees and founders that will vest subject to certain conditions.
Shopify said in a statement that the transaction would have no material effect on the company’s revenue in 2018. It’s expected to increase the company’s expenses by $25 million – including $10 million in operating expenses, $8 million in amortization of intangible assets, and $7 million in stock-based compensation. Shopify estimated that 6 River Systems will have annual revenues of roughly $30 million in 2020.
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