Who needs free shipping? Shipping startup Ingrid gives banks $23 million to provide a viable alternative

Image credits: Ingrid.com is operated under license.

(Unfortunately) not this author, but Ingrid, a Stockholm, Sweden start-up that has raised €21 million to fuel the growth of a business aimed at improving the final pesky mile of online shopping: delivery. (approximately $23 million). Using data science and some big ideas about how shipping will evolve over the next few years (for example, we think we need to move away from free shipping), the company hopes to We are on an ambitious trajectory to expand into the following markets:

There are many stress points in how e-commerce works, but shipping has long been considered one of the most painful. It can cost a lot of money (for both the buyer and the seller). This process can feel like something out of everyone's control, especially when something goes wrong (especially when you've paid for the “privilege”). Sometimes it feels like we are having too much of an impact on our environment. And that becomes a competitive advantage with Prime members offering “free” shipping by giants like Amazon, which will hit margins and make other retailers chase them forever.

“Shipping is the biggest unsolved puzzle,” Ingrid co-founder and CEO Piotr Zaleski said in an interview. “That’s where most things go wrong.”

Ingrid sees all of this and believes it can be solved with the platform it built to cover what Zaleski calls an “end-to-end” delivery experience.

Via an API, its services are integrated into retailers' purchase flows, allowing buyers to understand shipping prices more accurately and earlier, avoiding checkout shocks and subsequent cart abandonment.

Ingrid provides integration with shipping providers used by specific retailers, helps retailers add more carriers or delivery points, and allows consumers to customize delivery services, speeds, and prices they wish to use. Provide choices. Last year, Ingrid acquired returns specialist Turnr and integrated it into a larger platform, which helps her manage the post-sale process, from tracking customer orders to assisting with the returns process if needed. .

For those of you who are at all curious, the company name Ingrid was not named by me, Ingrid, to ensure coverage on TechCrunch. It was more of a random decision. Zaleski and his co-founder Anders Ekman, chief business development officer, wanted a familiar, positive name that would resonate in their first market, Scandinavia, and that they could export but keep part of Scandinavia. It was there. Spirit in future branding. After searching various names, I found that Ingrid.com was registered by an individual. This woman said her father worked in the technology industry in her 1990s and had the foresight to buy a domain name in his name for her daughter in case she needed it in the future. It was a woman who did. Ingrid's founders were shocked that this domain hadn't already been taken over by domain squatters demanding exorbitant prices, as many of the simplest domains are. So he was able to close the deal with her and get her to agree to sell her.

Returning to startup Ingrid, the company's basic understanding is that for retailers other than Amazon, fulfillment and logistics are not the core of their business, and for retailers that specialize in shipping, they are e-commerce experts. That is not the case. Therefore, providing a service that can better combine these is beneficial for both parties.

Ingrid's platform currently serves approximately 250 customers in 180 countries and has processed 130 million orders to date (currently approximately 40 million orders per year). The company did not disclose the proceeds or valuation of this round, but it brings the total amount raised by the startup to 32 million euros.

Ingrid has identified a very obvious problem that could definitely use a fix, but she also faces some challenges.

The first of these is what Zaleski acknowledges as the “cold start” problem. It is much easier for companies to build a business on a network of existing relationships than it is to build a business from scratch. So while the company currently has a whopping 20% ​​share of the consumer market in its home country of Sweden, Zaleski says that “more than 15% of consumers” who shop online have some kind of It is said that Ingrid will be used in the form. Judging by the acceleration of the business, it is expected to grow well over the next few years, but further challenges will arise as Ingrid attempts to enter entirely new markets.

One solution is to get on the backs of big customers and work with them to expand in new markets, which is what Ingrid is doing. “The only way is to build a great platform that retailers want to use to get volume positions,” Zaleski said. Ingrid's current client list includes Paul Smith, ME+EM, Sneakersnstuff, Estrid and Farmasiet.

Another challenge is the fact that there are many other companies that have identified the same challenges as Ingrid and are building delivery management platforms to address them. FarEye, Shipsy, and many other companies may have different approaches, products, and geographic locations, but the fact remains that they are all providing solutions to the same problem.

For Ingrid, the current regional focus and success will be a unique selling point. We also leverage data science to optimize the entire process. Not only are we increasingly understanding consumer segmentation, we are now able to offer them options that we think are more likely to be used as a result.

In fact, all of this is what caught the attention of investors this time

“We've been looking at software that enables e-commerce for a long time. Certainly, it's a very crowded field and it's going to take time to understand how it works.” , a director at Verdane, which ranks alongside Schibsted Ventures, the media company's venture arm. “But we know companies that can analyze [the space] and identify the winner. I love Ingrid's focus on her customer experience. They've optimized it, but other companies are still thinking in terms of logistics. ”

And that brings us to the third challenge, but Zaleski doesn't see it that way. Yes, customer service and the advanced idea that customers prefer certain services over others, even if they are expensive, feels like a worthwhile idea. This means that a buyer may choose a more expensive shipping route because, for example, the customer is more environmentally friendly. But realistically, many customers will choose the cheaper option. That's one of the reasons Prime and Amazon continue to kill it in the market, and one of the reasons they've forced the hand of so many others to find ways to offer “free shipping.” It's one.

The reality is that free is never really free. Zaleski and Ingrid believe that in the long run, this is not a goal that everyone should pursue. Because in the end, margin hits will destroy your business. As such, the distribution platform effectively overrides Amazon Prime-style competitors for retailers who want to offer these benefits but don't want to pay Amazon or lose important customer ownership in the process. Although potentially considering what products to build, Zaleski said: I'm not the one building it.

“I'm against free shipping,” he said. But he has a very social approach to how to reduce transportation costs and pass on the savings to buyers in a market where Ingrid has penetration. “If you're using our platform and you're also using multiple retailers, on Thursday, for example, instead of having your packages delivered spread out throughout the week, you can deliver one package to all those retailers. We can agree to deliver in an area. That means cost savings on the carrier's side.”

This also ultimately depends on Ingrid's scaling.