Target - $TGT

Target Buys Startup Shipt for $550 Million to Bolster Same-Day Delivery Services

12:20 PM, Dec 13, 2017 — Target (TGT) is buying delivery startup Shipt in a $550 million deal that will see the retailer expand its same-day shipping capacity as consumers increasingly turn to online shopping and home delivery.

The cash purchase will see Minneapolis-based Target join its network of stores with Shipt’s technology platform and community of shoppers, according to a statement on Wednesday. Founded in Birmingham, Alabama in 2014, Shipt uses shoppers to delivery groceries and other goods to customers in 72 cities.

“The acquisition significantly accelerates Target’s digital fulfillment efforts, bringing same-day delivery services to guests at approximately half of Target stores by early 2018,” the company said. “The service will be offered from the majority of Target stores, and in all major markets, before the 2018 holiday season.”

Retailers have been putting more money into online shopping, and in October Target’s rival, Wal-Mart Stores (WMT) acquired Parcel, a technology-based, same-day delivery startup based in New York in a move that was seen as a challenge to e-commerce giant Amazon.com (AMZN).

“With Shipt’s network of local shoppers and their current market penetration, we will move from days to hours, dramatically accelerating our ability to bring affordable same-day delivery to guests across the country,” Target Chief Operating Officer John Mulligan said.

Shipt will be a wholly owned subsidiary of Target, running its business independently, according to the statement. The deal is expected to close before the end of 2017.

Companies: Target Corporation
Price: 61.97 Price Change: +0.95 Percent Change: +1.56

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