Five years after its founding, Roadie, the crowdsourced delivery service startup based in Atlanta, has attracted partnerships with major retailers, including Walmart, and, in February, $37 million in new funding.
Some of that money comes from Warren Stephens and his family. The CEO of Little Rock’s Stephens Inc. praised the simplicity of Roadie’s business model. “It’s using people who are already going someplace that want to pick up an extra bit of money,” he told Arkansas Business.
“Quicker, faster delivery is something everyone is trying to do,” Stephens said. Stephens also invested in previous funding rounds to raise cash for Roadie, including its first.
Not only has Amazon fueled e-commerce, the online retailing giant has conditioned consumers to expect their parcels to be delivered in two days or less. Roadie has positioned itself to take advantage of this shift to instant gratification by using the excess capacity of passenger vehicles already on the road to move packages from one point to another.
The Roadie mobile app connects drivers with people who need to ship goods to where those drivers are already headed. The drivers earn extra cash ferrying those parcels to their destinations — think “Uber for package delivery.”
In September, The Home Depot announced it was working with Roadie and delivery company Deliv Inc. to provide same and next-day delivery of more than 20,000 products to customers in 35 metropolitan areas.
In February, Home Depot further demonstrated its confidence in Roadie when it joined Stephens and venture capital company TomorrowVentures, founded by former Google CEO Eric Schmidt. The Series C funding round brought the total funding raised for Roadie to $62 million.
This most recent cash infusion will let Roadie “continue to invest in our data science efforts to make on-the-way delivery, utilizing people already heading in the right direction, a reality in all places,” Roadie CEO Marc Gorlin told Arkansas Business. Roadie has made deliveries in 11,000 cities, can now reach 89% of U.S. households and has more than 120,000 drivers on its platform, he said.
“We want to continue to expand on that where Roadie drivers can reach everybody in the U.S. and beyond,” Gorlin said.
Delta Airlines, also based in Atlanta, is also a Roadie partner, first using Roadie to deliver delayed luggage in 2015. Delta expanded that partnership last year to more than 50 cities, and Gorlin said that would soon grow to more than 70 cities, “from San Francisco, Atlanta, D.C., Philly, Orlando, as well as smaller towns like Eugene, Oregon, and Chattanooga, Tennessee, proving that this crowdsourced on-the-way delivery model works” in both big cities and smaller towns that typical delivery services and retailers struggle to reach.
These partner companies “have locations all over the country,” Gorlin noted.
“Walmart obviously is great,” he said, “because the idea behind Roadie at its core was communities helping one another and folks helping each other, and it didn’t matter whether you lived in a big town or small town.”
Roadie began making deliveries for Walmart in November and plans to continue increasing the number of locations to which it makes those deliveries.
E-commerce Generates Parcels
E-commerce accounted for 14.3% of total retail sales in the U.S. in 2018, compared with 12.9% in 2017 and 11.6% in 2016, according to Internet Retailer, an online publication.
“More significant is that ecommerce sales represented more than half, or 51.9%, of all retail sales growth,” Internet Retailer said. “This is the largest share of growth for purchases made online since 2008, when e-commerce accounted for 63.8% of all sales growth.”
And with e-commerce growth comes an increase in parcel delivery, a development seen in something as seemingly unrelated as the delay in the Sun Bio Materials project in Clark County. The plant’s initial plans to produce bleached dissolving pulp used to make rayon were revised in favor of making unbleached linerboard for shipping boxes.
Asked about the “Amazon effect” as it relates to Roadie’s business model, Gorlin said: “Amazon is a great sales tool for us because if bricks-and-mortar retailers want to keep up with Amazon, they need an affordable and scalable solution to do delivery everywhere. And I truly believe that crowdsourced delivery is the only economic solution that’s going to make sense in time and with scale.”
He added: “I think one of the [important] things is just getting bigger companies comfortable with the idea that this crowdsourced model that doesn’t have dedicated fixed assets could work with the same consistency, reliability and often better customer service than having your own branded asset.”