Shopify sells majority of its logistics business to Flexport

Shopify is returning to its roots.

The e-commerce company is selling most of its fulfillment assets to logistics provider Flexport. The all-stock deal includes shipping service company Deliverr, which Shopify acquired in 2022 for $2.1 billion, and Shopify’s warehouses.   

In exchange, Shopify will receive a stake of about 13% in Flexport, which will become the official logistics partner for Shopify. Flexport will become the official logistics partner for Shopify.

Flexport is headed by Dave Clark, the former CEO of Amazon’s worldwide consumer business. Clark, who was at Amazon for 23 years, took the top spot at Flexport in September 2022.

“This acquisition is the last piece of the puzzle that enables us to drive technology-fueled solutions across the entire product life cycle from the manufacturer’s floor, across the oceans and skies, through ports and fulfillment, and, now, right into the hands of customers,” stated Clark in a post on the Flexport website.

 In addition, Shopify is selling its warehouse automation business, 6 River Systems, to UK-based Ocado Group.

"6 River Systems brings exciting new IP and possibilities to the wider Ocado technology estate, as well as valuable commercial and R&D expertise in non-grocery retail segments,” stated James Matthews, CEO of Ocado Technology.

As Shopify spins off parts of its business, it also is cutting about 20% of its workforce.  The company said employees being affected will receive 16 weeks of severance pay and medical benefits. 

“There’s no way to make this good news, but we designed a package that will attempt to make it the best possible version of a bad day,” Shopify CEO Tobias Lütke said in the blog post.