Stord acquires UPS specialty warehouse business for e-commerce logistics

Omnichannel fulfillment provider Stord has acquired Ware2Go, an on-demand warehousing and fulfillment network, from UPS, the companies announced on Monday.

The deal gives the Atlanta-based startup an additional 21 e-commerce warehouses, with a total capacity of 2.5 million square feet of storage space, allowing it to expand much more quickly into new markets to meet growing demand from e-commerce brands. Stord has an extensive network of fulfillment centers concentrated in 11 major metropolitan areas. 

Stord, founded in 2015, serves as a one-stop shop for e-tailers, managing more than $6 billion of transactions from customers’ online checkout to last-mile delivery and inventory management with a suite of warehouse management, order management and parcel transportation software. The Ware2Go acquisition follows the acquisition in recent years of Fulfillment Works, ProPack and Pitney Bowes E-commerce.

Last week, Stord announced it has raised more than $200 million in Series E funding from several banks and venture funds, which valued the company at $1.5 billion.

“We are in a unique period for e-commerce and retail as brands struggle to manage through shifting global trade policies. Even with macro uncertainty, e-commerce end consumers still expect rapid delivery, perfect order accuracy, easy returns, and more,” said Sean Henry, CEO and co-founder of Stord. “This acquisition of Ware2Go is a strategic investment that expands our U.S. domestic footprint and capabilities while strengthening our partnership with UPS. This partnership will allow us to deploy our technology across the Ware2Go network, enhance offerings for our joint customers, and combine our scale to be one of the largest fulfillment networks in North America.” 

UPS (NYSE: UPS) launched Ware2Go in mid-2018 as a platform that matches a diverse range of smaller B2B and B2C e-merchants with available warehouse space. The business aimed at positioning inventory as close to end-users as possible so they can meet guaranteed one-to-two-day deliveries. Through its technology, Ware2Go identifies warehouse capacity that is close to merchants’ end customers and vets warehouse operators. The network can scale quickly to meet a merchant’s expansion needs. Service offerings include direct-to-consumer shipping, seller fulfillment for sales on Amazon Prime and retail-compliant B2B shipments. 

UPS, which is in the midst of major network consolidation and cost-reduction initiatives, said the sale of Ware2Go will allow the company to concentrate on its primary express parcel delivery and supply chain management businesses.

“Along with initiatives such as Efficiency Reimagined and the optimization of our U.S. Network, UPS continues to look at ways to provide the most value to customers. The strategic decision to sell Ware2Go allows us to put even greater focus on our core business. We are being selective in the markets we want to serve and intend to serve them better than anyone else,” said Brian Hughes, director of financial and strategy communications, in an email response. “We look forward to strengthening our relationship with Stord and providing their customers access to UPS’s end-to-end services and broad product portfolio.”

Stord says it enabled nearly 1% of all Black Friday and Cyber Monday online sales in the United States and achieved record profitability last year. Customers include shower filter-maker Jolie, nonalcoholic beverage retailer and wholesaler The Zero Proof, oral wellness company Quip, and sunglass retailer Goodr.

Terms of the deal were not disclosed.

Click here for more FreightWaves/American Shipper stories by Eric Kulisch.

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