Atlanta shipping giant United Parcel Service (NYSE: UPS) announced plans to buy local logistics technology startup Roadie as part of an investment into same-day delivery solutions.
The Sept. 10 announcement by UPS did not disclose the financial details of the deal, which is set to close at the end of the year.
Roadie, led by CEO Marc Gorlin, uses its “on the way” app to help small businesses and big U.S. retailers, including Home Depot and Walmart, close gaps in the last mile of their distribution networks. The startup uses a gig economy model to match drivers with excess room in their personal vehicles to companies with deliveries in the same direction.
"The deal brings UPS flexible, scalable local same-day delivery technology and an Atlanta-based innovation team ready to support an array of differentiated service offerings, including 2-hour critical and cold-chain compliance," Roadie said in a statement.
Roadie has 200,000 drivers and a footprint that covers 90% of the U.S. The Technology Association of Georgia named it one of the most innovative companies in Atlanta.
The startup raised $62 million since its founding in 2014, according to Atlanta Inno. UPS, The Home Depot, Warren Stephens and Eric Schmidt’s TomorrowVentures are investors.
This deal connects the generational expertise of Atlanta’s thriving logistics sector, which has grown because of the e-commerce boom spurred by the coronavirus pandemic. Logistics technology startups, such as Roadie, Verusen and Stord, are seeing massive growth and investments, while companies such as UPS and Delta Air Lines provide the physical infrastructure for the supply chain to function.
Roadie saw huge volume increases “that might have been 3,000% up from what they were a couple months ago,” Gorlin told Atlanta Business Chronicle in July.
UPS also saw a massive uptick in business because of the pandemic. Executives said in June that the company was looking into same-day delivery options, according to The Wall Street Journal. CEO Carol Tomé, who started her tenure in June 2020, brought a wave of changes to the company, championing "better, not bigger" positioning to focus on the company's core products.
UPS revenue was $23.4 billion in the second quarter of 2021, which was up 14.5% from the previous year, according to the company's earnings report.
After the acquisition, Roadie will operate under the same name and will ship goods only within its network, according to the announcement. UPS drivers will continue to operate within the UPS network.
