UPS dips toes into same-day delivery with Deliv investment

UPS Worldport Hub operations-cropPossibly hearing footsteps from its rivals in the e-commerce logistics businesses, such as Amazon, United Parcel Service (UPS) has invested US$28 million in a new startup company called Deliv Inc., which specializes in performing same-day parcel delivery.

The investment was made via the integrator’s UPS Strategic Enterprise Fund, its Atlanta-based corporate venture arm. “We don’t participate in the on-demand business as much, and the consumer side of this is still a bit of a mystery to us,” Rimas Kapeskas, managing director of the UPS fund, told Reuters. “This is a rapidly evolving marketplace and we thought we could learn more by being close to it.”

Deliv has been compared to the Uber ride-sharing service, in that it employs a fleet of crowd-sourced contract drivers, which allows the company to avoiding healthcare costs and other overhead concerns. For a fee, Deliv’s drivers pick up online orders from retail stores and deliver them to customers on the day they are ordered. The startup sees this store-as-distribution-center model as away to compete with Amazon’s popular Prime Now same-day package delivery service for certain orders.

So far, Deliv has raised $40.5 million from investors including Upfront Ventures, RPM Ventures and mall operators, such as General Growth Properties. The company now operates in about 100 U.S. cities and handles last-mile delivery for various malls and retailers, including Macy’s, Kohl’s and Best Buy. UPS will take a minority stake in the California-based Deliv and take part in its board meetings, Reuters said.

“We are solving a different problem in the last mile,” Deliv CEO Daphne Carmeli told Reuters. UPS, she added, is “looking to learn about growth in same-day delivery as we are interested to learn from their success.”

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