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Byrd raises $19M to expand Amazon-style fulfillment and logistics to more e-commerce merchants in Europe

E-commerce in Europe is set to grow 30% percent this year, with the online shopping surge that started at the rise of Covid-19 showing little sign of abating. Today, a startup that’s building infrastructure in the region to help merchants fill and deliver those orders — and present an alternative to using Amazon for fulfillment […]

E-commerce in Europe is set to grow 30% percent this year, with the online shopping surge that started at the rise of Covid-19 showing little sign of abating. Today, a startup that’s building infrastructure in the region to help merchants fill and deliver those orders — and present an alternative to using Amazon for fulfillment — is announcing funding to expand its footprint to meet that demand.

Byrd, which builds software to manage warehouses and logistics operations, and also runs a service to help online merchants store, pick and deliver their orders, has picked up €16 million ($19 million), a Series B that it will be using to expand to five more markets in eastern, northern and southern Europe in addition to the five countries where it’s already active. Founded in Vienna, Austria in 2016, Byrd is also in the UK, Germany, the Netherlands, and France, where together it has some 15 fulfillment centers and 200 customers, including Durex, Freeletics, Scholl, Your Superfoods and other D2C brands in health and wellness, consumer packaged goods, cosmetics and fashion.

Mouro Capital — a strategic fintech/e-commerce VC that was spun out from banking giant Santander last year — led the round, with Speedinvest, Verve Ventures, Rider Global and VentureFriends also participating. Byrd isn’t disclosing its valuation but has raised some €26 million to date.

The gap in the market that Byrd is going after is a growing one, not just in terms of size but in terms of retailers’ demand, and what they are looking for in a fulfillment partner.

E-commerce is a deceptively complex business — deceptive, because as consumers all we ever really see or care about is the ability to find what we are looking for at a decent price, click on it, buy it without too much fuss and have it appear at our doors, ideally asap.

But the steps needed behind the scenes to make all of that possible are many, and mostly complex, and not usually in the core competency of a typical small retailer, who may have identified a product it thinks the world wants, but not how to get it to them. They include marketing, payments, user interface designs, personalization, manufacturing and other supply chain concerns, and yes, the logistics and fulfillment to get orders to customers. As e-commerce continues to become a bigger channel, all of these segments in the chain represent ever-growing opportunities.

Typically, retailers will look to third-party tech companies to provide these different services, and this is where Byrd comes in, as an outsourced partner to handle companies’ logistics and fulfillment. The company has built a set of APIs that let retailers essentially plug in and shift the whole fulfillment operation to Byrd.

That includes integrating with Byrd’s warehouses to receive, store and pick items; and it also includes connecting with a company’s merchant network, which could include a merchant’s own online storefront, but also Amazon and other marketplaces where items are sold. When an order comes in and it is time to pick and ship an item, Byrd also uses its tech to taps into a network of different shipping companies — the list includes the likes of UPS, DHL, Amazon, postNL and others — to find the cheapest and easiest way of getting an item to the buyer.

To be totally clear, Byrd is not the only one doing this. But alongside other independent companies that compete with Byrd — one of the biggest, ShipBob, last week raised a big round of $200 million on a $1 billion valuation — is a big elephant in the room in the form of Amazon. The e-commerce giant has positioned itself as something of a one-stop shop for merchants, providing not just fulfillment (via FBA), but storefront visibility, marketing and much more.

The size of Amazon is such that it typically accounts for a large market share, and many merchants can’t not have a presence there even if it’s primarily as a customer acquisition channel, said Petra Dobrocka, co-founder and CCO of Byrd, in an interview.

But the problem is that the Amazon option, and some of the other third-party providers, don’t leave much to personalization. Indeed, as e-retailers continue to mature, and find themselves facing their own stiff competition, they are looking for more ways of getting an edge, and to stand out from the crowd. Byrd provides something here for them, too, giving them the option to customize packaging so that customers are essentially experiencing a direct service, even when it’s actually coming from Byrd, and to give them options to go for more sustainable delivery and more if they choose.

That has possibly meant a slower rate of scaling for the startup, but it comes as a quality option, and that counts for something in a world that is teetering on very poor quality control, and definitely lack of distinct identity, in some marketplaces particularly as they continue to scale.

“You could say we are an alternative to Amazon, but also quite different. Our sellers are very brand-focused and want to provide a total experience total to customers,” Dobrocka said. “We also have smaller customers who appreciate this.” Indeed, as is so often the case, smaller businesses get short-changed on service levels compared to bigger businesses, so having a fulfillment service that treats even smaller retailers like bigger ones is a plus.

This is also part of a bigger trend, where a wave of tech companies are emerging to help those retailers build more distinct online presence and personalization, too. (The online storefront design platform Shogun, which also announced funding last week, is another example of a startup playing into this trend.)

All of this has led to Byrd seeing some very strong growth — revenues are up 300% compared to a year ago — with “hundreds of thousands of parcels per month” being handled, the company said.

Although its primary business is in catering to the very big B2C opportunity one obvious adjacent area where Byrd could work is in B2B, and Dobrocka said that will also be coming online in the coming months. Alongside that, while the company hasn’t specified which countries it will build out its fulfillment in next, given Mouro’s involvement, I’m guessing that Spain might be one of the next countries on the list.

“We are delighted to be leading Byrd’s Series B funding round, particularly as the pandemic has brought the need for flexible, digital e-commerce fulfilment solutions into sharp relief,” said Manuel Silva Martínez, general partner at Mouro Capital, in a statement. “Byrd’s end-to-end capabilities, focus on sustainability, and household brand customers set it apart from its competitors, and we look forward to seeing the successes that the geographic expansion enabled by this investment will bring.”

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