Insider Access: How ShipBob built a global fulfillment network & raised >$330M in funding

A first-time founder raises over $330M from SoftBank, Bain, and others. Insert another. And another.

Jul 14, 2021

“Insider Access” is where I talk with founders and CEOs, as they share with us what actually happened and the why behind the most pivotal moments in their company’s history. Please see below for prior interviews.

This week, we have a very special guest…my boss: Dhruv Saxena, who is the CEO and co-founder of ShipBob.

He’s been extremely influential on me and how I think about business. He can dissect complex challenges, simplify the issue at hand, and create roadmap of next steps on the spot as well as anybody I’ve worked with.

As a first-time founder who moved to the US in his early 20s, he’s built a global logistics platform with 24 fulfillment centers across 5 countries that supports over 5,000 ecommerce brands shipping millions of items per month.

Continue below to read the origin story for ShipBob, how he’s raised over $300M from VCs like SoftBank and Bain, and what the future holds…

Casey Armstrong: You started ShipBob in your one-bedroom apartment in Chicago with your childhood friend, Divey Gulati. In seven years, you built a global logistics platform that supports over 5,000 ecommerce brands. Looking back, what’s a time in the really early years where you thought “this could be the end of us” and how did you overcome that?

Dhruv Saxena: For everyone who reads this essay, I really hope the one thing that they take away from this is this:

Startups are never a straight line.

What TechCrunch and other journals don’t report on is the other 364 days of the year: when the startup founder is completely overwhelmed, when your largest investor is pulling out, when your biggest customer is churning, or when the product is down for seemingly no reason whatsoever.

One year into ShipBob, right before we were getting ready to raise our Series A round, a San Francisco-based startup in the same logistics space as us and more recognized in VC circles, raised a $50M round from blue chip investors. In 2015, this was a really large venture round.

So for us, as first-time founders who were not based in San Francisco and trying to raise our first ever round of institutional venture capital, raising money to survive was an extremely uphill battle. Every VC was declaring that logistics is a winner-takes-all market, like Uber, and the other company was going to be the default winner.

We had maybe 4-5 months of runway left, I had just gotten married, and we were getting rejected from all VCs. That was the closest we came to “this may not work out the way we had thought it would.”

I was embarrassed and disappointed that I had let my colleagues and family down.

CA: As a first-time founder who has now raised five meaningful rounds from prominent VCs and surpassed the billion-dollar valuation milestone, what would be your #1 tip for first-time founders, especially those not in Silicon Valley?

DS: This took me a while to really wrap my head around, but to every startup founder, here is my public service announcement:

Venture capitalists don’t get to decide whether you are building a great company or not. Your customers get to decide your fate. Don’t over index on the feedback you get from the VCs, both on the good and the bad.

Use your own intuition and talk to your customers to understand how they are using your product and whether your value proposition is sticking and what is working and what is not.

During the really dark days at ShipBob, what would give me the most comfort is that we had real paying customers who would be disappointed if ShipBob ceased to exist. So my job was to get access to capital, so I could continue building on behalf of my customers.

And I have another tip:

You only need one VC to say “Yes.”

This means you can get a “No” from literally every VC but one, and that means you can now raise a round.

So knowing that means being okay getting told “No” a lot because the one VC who will tell you “Yes” is just further down the list and you just haven’t gotten to them yet.

CA: When we debate product roadmap and strategy, you often bring us back to our mission statement: democratize world-class fulfillment for brands of all sizes. What’s the biggest thing that’s stayed the same in the ShipBob mission and the biggest thing that’s changed from Day 1 compared to today?

DS: I don’t think our mission has changed at all.

The wording and go-to-market around the mission has of course evolved, but the spirit of our mission has remained exactly the same.

This is one of my strongest beliefs.

As founders, we need to fall in love with the problem statement and the market we are going after and not with our current solution or product. This falling in love with the problem allows us to be consistent with our mission and really go after the market.

Being unemotional about the product then gives us the freedom and the courage to iterate and change course when we learn something new about the market. A lot of times, I see founders too obsessed with their product and not with the problem. Unless you are Steve Jobs, that’s usually not a good sign, as being too emotionally vested in our product will push us to discount the market feedback and prevent us from making rapid iterations based on the feedback we are hearing from the market.

Over the last seven years, our solution has consistently evolved, but the problem statement of our business has remained exactly the same.

CA: Of course, I have a view into our roadmap in 2021 and beyond, but what are you most eager to launch and see grow for our current and future customers?

DS: To start, Amazon is an exceptional company to model after. It has constantly raised the bar on what a great online buying experience looks like, which is primarily focused on fast and free shipping.

For the direct-to-consumer ecosystem to have access to a similar, and in some cases a better, logistics infrastructure is extremely powerful as now a brand of any size can provide their customers with the same experience without having to rely on Amazon.

This means brands can compete on a completely new dimension. They can compete on the basis of building a better product and not on building a better supply chain, which will allow them to win, as they are run by passionate, dedicated founders.

So at ShipBob, all our efforts should be focused on giving our brands a competitive supply chain edge over the Amazons and Walmarts of the world, by helping provide the infrastructure for affordable and fast shipping along with the ability to customize their fulfillment.

This shows up in us doubling our fulfillment center count from 12 to 24 in the last six months and doubling that again next year.

This shows up in us evolving customization from custom boxes and poly mailers to things like gift notes.

This shows up in our aggressive acceleration of all things B2B and B2B2C.

This shows up in allowing our customers to sell on or through any channel and connect their data to any solution they want. We went from a few integrations to a robust app store with 40 integrations, which we’ll double again by next year.

And last, but not least, our tireless commitment to fast and affordable shipping. As you know, we have added so many regional carriers in the US and abroad, and we’ll never slow down there.

CA: A question that I asked you last week that I’d like to dig in a bit more, beyond our focus areas for the next five years at ShipBob, what areas of innovation in ecommerce are you most excited about and watching closely?

DS: Well, I started touching on this briefly in my last answer, but for a very long time, the big four carriers of UPS, USPS, FedEx, and DHL have dominated the last-mile shipping, which is getting the product to the end customer.

However, with the surge in ecommerce, these carriers have had difficulties maintaining their SLAs.

In the last year, there has been a surge of new, bold companies getting started in the last-mile shipping space who are competing head on with the big four carrier companies in incredibly innovative ways.

I am optimistic that innovation in the last-mile shipping space will provide more optionality to our customers, which will result in faster and cheaper shipping capabilities, and therefore indirectly will drive more ecommerce adoption through direct-to-consumer brands being able to offer these capabilities.

CA: You’ve built a company that thousands of businesses rely on to operate and it’s not just pure software, but software and the entire fulfillment side of the supply chain. What advice do you have for founders managing the chaos of not just building something nobody else has done before, but doing it at a hyper-growth pace?

DS: I am usually on the receiving end of advice, but I will take my chances here.

Have a lot of faith in yourself, your co-founders, and your early team. You will need their help and support in making your vision come true, so choose them wisely.

Major in the majors: Not every fire needs to be extinguished this very minute. Get really good at identifying which fires need to be put out that day, so things that will kill your business, versus the fires that are okay to continue burning. You can never solve everything, so solve the problems that you think will kill the business.

Lastly, have fun doing it. Take a lot of pictures of the everyday, mundane things. This is something I regret not doing more. You are doing something which is truly remarkable, so take a minute to breathe and enjoy the journey.

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Prior Insider Access interviews:

Ben Jabbawy, CEO of Privy: His company was acquired by Attentive after being down to just $1k several years prior.
Adii Pienaar, Co-founder of WooCommerce, Conversio & Cogsy: He founded WooCommerce in the 2000s from South Africa and it now powers over 5M websites.
Alek Koenig, CEO of Settle: He raised back-to-back rounds in less than six months from Founders Fund and Kleiner Perkins…as a first-time founder.

The State of Ecommerce

What’s happening in the ecosystem? Who’s up? Who’s down? Who’s building the future?

Spoiler: Klaviyo is big. Andrew Bialecki is really smart. Jason Lemkin is really smart. Watch this and throw the speed to 1.75. Will be the best 30 minutes you’ve spent on YouTube in a long time.
The Shopify Growth Paradox: As told by a former Shopify Plus account exec who now pals around with Gary V.
Your CAC doesn’t matter: As told by a former Bonobos marketer who now writes checks to companies like Modern Fertility and Sunday.
Walmart crosses the 100,000 seller mark: The Walmart marketplace has doubled for the second year in a row.
Carol Tomé leading UPS: As the first outsider and female CEO of the 114-year-old company, she has the stock up 112% since she took the helm and inherited 500,000 employees. Interesting fact: Employees hold roughly 70% of UPS stock.
Biden digs DTC: According to the White House press secretary, the President will take executive action to create more competition among the rail and ocean shipping to address supply chain issues that driving prices up for consumers.
The 2021 supply chain fallout from short-term planning: US seaborne imports of consumer discretionary goods in May increased 88.2% year-over-year, while the inventory-to-sales ratio in the US retail sector fell to 1.07 in April compared with a level of 1.47 averaged in 2019 as a pre-pandemic benchmark.
Freight is expensive: The cost of a 40-foot container has risen 3x or more in the last year.
Warehouse space, so hot right now, warehouse space: It’s not just Amazon.
Is Lulu on mushrooms? Lululemon gets creative with their supply chain, as they start making yoga mats out of mushrooms.

Acquisitions & IPOs

Liquidity events fuel the market, drive new innovation, and create new founders with deep experience and even deeper pockets. Who’s getting acquired? And who’s going public?

Stamps: For a cool $6.6B, the iconic web 1.0 company that has made very deft acquisitions over the years, has been acquired by Thoma Bravo.
LiveArea: The Japanese holding company Dentsu acquired LiveArea from PFSweb for about $250M and will fold the company into Merkle. According to Zach Hanlon, this is really good.
Hero: Fresh off their $639M round, Klarna has acquired Hero for $160M. Inside scoop: I still like this song.
Zomato: The Indian food delivery company plans to raise $1.3B in India’s biggest IPO of the year. Their investors include Ant Group, Tiger Global, Dragoneer, Fidelity, and Sequoia Capital.
D-MARKET (aka Hepsiburada): The first Turkish company to IPO on Nasdaq hits a $3.9B valuation as it raises $680M.
VTEX: The Brazil-based provider of ecommerce solutions is targeting a $3.3B valuation in its IPO. They have raised $377M from SoftBank, Tiger Global, and others.
Torrid: The Los Angeles-based plus-sized women’s fashion brand owned by Sycamore Partners, raised $231M in its IPO, valuing it at $2.3B. In 2020, Torrid served 3.2M customers with sales totaling $974M.
Riskified: The Israel-based provider of ecommerce fraud protection filed for an IPO on reports of a $7M net loss for 2020 with $38M in revenue. They have raised over $225M from Genesis Capital, Pitango, Fidelity, and General Atlantic.
Authentic Brands: The consumer lifestyle brands portfolio is targeting a $1.5B IPO. Their holdings include: Eddie Bauer, Aeropostale, Brooks Brothers, Lucky, Forever21, Volcom, Barneys, Airwalk, Sports Illustrated, Shaquille O'Neal, Elvis Presley, Marilyn Monroe, and Muhammad Ali.

Following the Money

Who are VCs betting on to lead the future of ecommerce?

Flipkart: The India-based ecommerce conglomerate raised $3.6B at a $37.6B valuation led by GIC, CPP Investments, SoftBank, and Walmart. Additional investment came from others including Tencent, Franklin Templeton, and Tiger Global. Flipkart says it has amassed over 350M registered users across its services.
Pine Labs: The India-based commerce platform raised $600M at a $3B valuation from Fidelity, BlackRock, and others. Early backers include Sequoia, Temasek, PayPal, and Mastercard.
ManoMano: The French online marketplace for DIY and gardening products raised $355M in a Series F round valuing the company at a $2.6B valuation led by Dragoneer with investment from Temasek, General Atlantic, and others.
Elevate Brands: I can’t write a newsletter without announcing an Amazon rollup play. Elevate raised $250M in equity and debt from FJ Labs, the founders of QuadPay, and others. The company says they have 25 brands, many of which have patents for their products, and are operating profitably.
Clearco: Shout out to Michele and Andrew for raising $215M from SoftBank, as they look to disrupt capital.
Kurly: The South Korean grocery delivery startup raised a $200M Series F valuing the company at a $2.2B valuation. The round was co-led by Aspex Management, DST Global, Sequoia Capital China, and Hillhouse Capital.
Licious: The India-based ecommerce seller of fresh meat and seafood raised a $192M Series F valuing the company at over $650M. The round was led by Temasek and Multiples Private Equity.
DealShare: The India-based social commerce startup raised a $144M Series D led by Tiger Global, valuing the company at $455M.
Eobuwie: The Poland-based online shoe retailer raised $130M from SoftBank ahead of its planned IPO.
Rohik: The Czech-based grocery delivery startup raised a $119M Series C led by Index Ventures, which values the company at $1.2B. The company has already expanded to Hungary and Austria, and is planning its first launch in Germany.
Glossier: The innovative DTC brand raised an $80M Series E valuing the company at $1.8B.
Shogun: As one of the leaders in headless commerce, they raised a $67.5M Series C led by Insight Partners, valuing the company at $575M.
MaxAB: The Egypt-based B2B food and grocery delivery startup raised a $40M Series A led by RMBV.
Specright: The Orange County-based supply chain management solution raised a $30M Series B led by Sageview Capital.
Rumors are swirling that their VP of Partnerships is nearly undefeated in sports trivia.
Forum Brands: The San Francisco-based Amazon rollup company raised $27M led by Norwest Venture Partners.
Karat Financial: The San Francisco-based provider of corporate credit cards for digital creators raised a $26M in Series A led by Union Square Ventures with participation from GGV Capital and SignalFire.
Juni: The Sweden-based neobank for ecommerce companies raised a $21.5M Series A co-led by DST Global and Felix Capital with participation from Cherry Ventures.
Popshop Live: The live ecommerce shopping network raised $20M at a $100M valuation. The round was led by Benchmark with participation from Mantis VC (The Chainsmokers’ VC vehicle), Baron Davis, Hailey Bieber, and Kendall Jenner.
Pietra: The creator commerce platform raised a $15M Series A led by Founders Fund, which values the company at $75M.
Talkshoplive: The Los Angeles-based livestream shopping platform raised $6M led by Raine Ventures.
Locad: The India-based cross-border ecommerce logistics startup raised $4.9M led by Sequoia.