Shopify will acquire 6 River Systems in $450m deal

11 Sep 2019

Shopify's Ottawa headquarters. Image: BalkansCat/Depositphotos

Following the acquisition, 6 River Systems will continue to build and sell its solutions for warehouses.

On Monday (9 September), e-commerce platform Shopify announced its intention to acquire collaborative warehouse solutions company 6 River Systems.

Founded in Massachusetts in 2015 by Jerome Dubois, Rylan Hamilton and Chris Cacioppo, 6 River Systems is currently operating in more than 20 facilities in the US, Canada and Europe, fulfilling millions of units every week for companies such as DHL, Office Depot, ACT Fulfilment and XPO Logistics.

The agreement will see Shopify acquire all of 6 River Systems’ outstanding securities in a transaction valued at approximately $450m. This deal consists of 60pc cash and 40pc in Shopify Class A subordinate voting shares.

It is expected to close in the fourth quarter of 2019 and is not expected to have any material impact on Shopify’s 2019 revenue.

Ottawa-based Shopify, which powers more than 800,000 businesses and is used by brands such as Unilever and Kylie Cosmetics, said that the acquisition is “a critical step to accelerate growth”.

In June 2019, the company introduced the Shopify Fulfilment Network with the aim of ensuring timely deliveries, lower shipping costs and an improved customer experience for consumers and merchants.

6 River Systems’ fulfilment technology will help to improve Shopify’s new network, but the firm will also continue to build and sell its solutions for warehouses.

‘Changing the game of fulfilment’

In a statement, Shopify said: “With the acquisition of 6 River Systems, Shopify will add a team with decades of experience in fulfilment software and robotics, including experienced leaders from Kiva Systems (now Amazon Robotics).”

The acquiring firm will adopt 6 River Systems’ cloud-based software and collaborative mobile robots, called ‘Chuck’, to the Shopify Fulfilment Network to increase the speed and reliability of warehouse operations.

The Ottowa company’s CEO, Tobi Lütke, said: “Shopify is taking on fulfilment the same way we’ve approached other commerce challenges, by bringing together the best technology to help everyone compete. With 6 River Systems, we will bring technology and operational efficiencies to companies of all sizes around the world.”

Co-CEO and co-founder of 6 River Systems, Dubois, added: “By joining Shopify, we’re changing the game of fulfilment. Together, we will help thousands of businesses improve their fulfilment operations, with an easy-to-learn solution that can more than double productivity and improve accuracy.”

Shopify’s Ottawa headquarters. Image: BalkansCat/Depositphotos

Kelly Earley was a journalist with Silicon Republic