When your main competitor is so moneyed, it’s buying up enough jets to start a small airline, there’s not much hope of survival without a warchest of your own.
While it pales in comparison to the $50 billion in revenue Amazon raked in during the third quarter alone, last mile delivery startup Veho raised $125 million on Tuesday for that reason. Now all it has to do is compete with the most advanced and sophisticated delivery network in the history of civilization.
The Green Last Mile
Amazon has staked out 50% of the $108 billion last mile delivery market, according to research company Technavio. Its seemingly endless line of Prime products — which executives are borderline obsessed with getting to customers within one day of shipping — and gigantic delivery network that includes warehouses, vehicles, and Boeing 767 airliners makes it seem near impossible to take on.
Veho is trying anyway. Rather than rely on infrastructure at Amazon’s scale, which no one can do because no one has that kind of money, the company is using technology. Veho’s platform matches package delivery demand with driver partners — yeah, another “Uber of” startup that leverages third party workers. Its target customers are e-commerce businesses, 50% of which say they want to offer delivery times faster than 7-10 business day averages that Amazon can beat. There’s still a very long way to go:
- Veho is only up and running in 14 US markets, though it plans to reach 50 by the end of 2022 and is forecasting it can carve out market share as the $800 billion e-commerce economy grows $100 million a year, according to SAP analysts.
- The $125 million Series A round announced Tuesday, which valued Veho at $1 billion will fund technology development, additional staff and the introduction of a doorstep returns program.
The Other Racers: In the last six months alone, last mile startups Zoomo, Cargamos, Coco, Deliverr and Bringg all announced new rounds. Walmart also joined the highly competitive space with its Walmart GoLocal program, which allows other retailers to tap the retail giant’s delivery network.