Walmart acquires NYC delivery startup Parcel as Amazon battle heats up

(Author Paul Sawer)
Walmart has acquired Brooklyn-based delivery startup Parcel, representing the fifth technology startup acquisition by the retail giant in the past 14 months.

Founded in 2013, Parcel is a so-called “last-mile” delivery platform designed to help e-commerce companies get their goods from their premises to customers’ doors. It operates around-the-clock too, delivering packages in scheduled two-hour windows, overnight, or the same day an order is placed.

The offline / online retail war has taken an interesting turn over the past few years. Internet giant Amazon has increasingly edged into groceries and other household goods, and earlier this year Amazon really laid down the gauntlet to brick-and-mortar rivals such as Walmart when it announced it was buying supermarket chain Whole Foods in a $13.7 billion deal.

Walmart, for its part, has been investing heavily in bolstering its e-commerce credentials too, and acquisitions are playing a key part of its strategy — last August, Walmart confirmed it was buying online retailer for $3 billion in cash. In the intervening months, Walmart has snapped up online clothing retailer Shoebuy for $70 million; active outdoor retailer Moosejaw for $51 million; and mens clothing brand Bonobos for $310 million.

Parcel launched initially in New York back in 2014, it hasn’t expanded into other markets yet, and it had only raised around $2 million in seed funding — so Walmart is unlikely to have paid crazy money for the startup. Indeed, Walmart did state that the acquisition price was “smaller than previous acquisitions we’ve made this year,” which suggests it was less than $50 million, and in reality it was likely significantly less than that figure.

In terms of what Walmart has in store for Parcel, well, it probably won’t surprise you to learn that it plans to use Parcel’s platform for last-mile deliveries in New York City, covering “general merchandise” as well as “fresh and frozen groceries” from both Walmart and Jet.

However, Walmart is seemingly keen to continue serving Parcel’s existing clients as well. “Parcel has partnerships with several meal kit, grocery and e-commerce companies, and has delivered more than 1 million meals in the past two years,” Walmart said in a blog post. “So our immediate plan is for Parcel to continue serving its existing clients and growing its customer base.”

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