February 25, 2016, 4:14 PM

Deliv raises $28 million with UPS as the lead investor

The UPS Strategic Enterprise Fund is backing the same-day delivery service.

Lead Photo

Same-day delivery service Deliv this week raised more than double its previous funding with a $28 million investment led by UPS.

In addition to the UPS Strategic Enterprise Fund, existing investors Upfront Ventures, RPM Ventures, PivotNorth Capital, General Growth Properties, The Macerich Co., Simon Venture Group, Taubman Centers Inc. and Westfield Corp. participated in the Series B round.

The latest round is on top of about $12 million raised previously, bringing total funding to $40.5 million, Deliv CEO and founder Daphne Carmeli says.

Deliv plans to expand its delivery service to more cities—it’s in 17 markets now—and further invest in its proprietary technology to attract more retailer clients, Carmeli says. More retailers have agreed to use Deliv to delivery online orders from stores, but Deliv is not ready to announce them, she says.

Carmeli says working with UPS is a natural fit.

“We were looking for Series B funding. These transportation carriers have been in business for long time and understand logistics, so why not have one invest in the company?” Carmeli tells Internet Retailer. “We can share insights on both sides, and we decided to go for the largest (carrier) in the world. We can learn from each other, we have common customers. We don’t compete with UPS—we have different markets and models.”

“Deliv has gained a strong position in the same-day delivery market by offering a unique solution that serves some of the largest retailers in the U.S.,” says Alan Gershenhorn, executive vice president and chief commercial officer for UPS. “Our Strategic Enterprise Fund continues to invest in companies that have innovative business models, and we look forward to gaining further insights into the market dynamics of same-day delivery.”

Retailers that work with Deliv pay a delivery fee determined by how far drivers go to deliver a package. Drivers travel up to 15 miles from the store that fulfills the order, and retailers set their own price for the same-day service. Deliv would not disclose the fee range.

Deliv says in 2015 it more than doubled the number of markets it serves to 17, increased delivery volume tenfold and is profitable. Its clients include a number of retailers in the Internet Retailer 2015 Top 500 Guide, such as Macy’s Inc. (No. 7), Bloomingdale’s (part of Macy’s), Best Buy Co. (No. 14), Kohl’s Corp. (No. 22), Walgreen Co. (No. 44), Foot Locker Inc. (No. 54) and online florist 1-800-Flowers.com Inc. (No. 56).

It also works with marketplaces and e-commerce leaders including Google Express, Farfetch, The Bouqs and Plated. Local merchants and businesses also use Deliv to send documents across town or to deliver such things as cupcakes and supply parts.

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