Rethinking last-mile logistics as the eCommerce boom continues

Everybody has experienced the pain of slow and unreliable deliveries at least once; the present you didn’t get on time, a special occasion outfit that encountered shipping delays or some purchase you’d forgotten about that arrived weeks later.

Despite fierce growth in eCommerce sales, the delivery infrastructure built around it has more or less been stagnant; many operators still transact the same way that they always have. One-third of third-party logistics (3PL)’s orders are ingested into the warehouse management system via manual flat-file loads, one-third using API’s, and one-third with EDI.

eCommerce continues to compete with and grow faster than brick and mortar retail. The speed and cost of shipping are major levers that drive eCommerce market share away from traditional retail, with consumers actively opting for fast and free shipping products. Large retailers can negotiate bulk buy discounts with major courier companies or 3PL’s while small independent retailers are price takers and are left with either slow delivery solutions or expensive, expedited options. This dynamic also extends to delivery operators, with most of the value accruing to major couriers, and marginalizing independent localized couriers.

US eCommerce grew 32% in 2020 accounting for ~18.5% of retail sales, with UK eCommerce sales closer to ~30%

eCommerce demand shows no signs of slowing. The recent acceleration of consumers’ strong pre-existing intent to purchase more online, means that there has never been a greater need for a scalable solution designed to level the playing field and “coordinate the chaos” of last-mile logistics. The operational disparity between large retailers and couriers, and everyone else has been growing, but it doesn’t need to be this way.

One company that we see as an industry game-changer is Swyft. Founded last year, Swyft is on a mission to empower independent couriers and retailers by providing a holistic platform to unlock last-mile logistics efficiency.

Today Inovia announced our Series A investment in Swyft alongside Forerunner Ventures, Shopify Ventures and existing investors Golden Ventures and Trucks VC. Inovia partner Karamdeep Nijjar will be joining their board of directors.

Swyft is a software layer that aggregates both supply and demand of last-mile delivery. On the delivery side, they combine existing couriers to build a large virtual delivery fleet, provide real-time delivery updates via its carrier dashboard and multi-party optimized routing. On the product side, Swyft integrates into the checkout experience of SMB’s offering dynamic delivery options regardless of the retailer’s fulfilment strategy (i.e. ship from store, warehouse, 3PL). The platform is designed to provide customers with quick delivery solutions, Sephora purchases via Instacart or Net-A-Porter’s on-demand delivery service as examples, without crimping retail margins.

Swyft’s platform is the only model designed to scale both sides of the marketplace without huge CapEx investments, we call this delivery via API. Technology is being substituted for labor and physical assets and their distinctive asset-light model and powerful network effects can solve the regional problem for SMBs and national problem for enterprises. All through software!

While the end game is the same, Swyft’s cost structure and workflow differentiate them from other solutions and compared to large carrier rates, Swyft is dramatically cheaper for SMB brands. The inherent flywheel nature of their model means that over time Swyft will be able to materially drive down the cost of delivery operations, and unlock same-day delivery for all at comparable costs. The pain of waiting weeks for online orders to arrive will soon be over.

We believe that the team at Swyft have the vision and capability to redefine last-mile logistics, and we couldn’t be more excited about partnering with them during their next phase of growth.