Shopify is acquiring 6 River Systems, a startup focused on warehouse automation technology development for e-Commerce and retail operations. The purchase is designed to accelerate the growth of the Shopify Fulfillment Network, which launched in June. The deal is valued at approximately $450 million — 60% in cash and 40% in shares.
With 6 River Systems, Shopify adds cloud-based software and collaborative mobile robots called “Chuck,” capable of moving packages around a warehouse, to the Shopify Fulfillment Network. The 6 River technologies are designed to help Shopify increase the speed and reliability of its warehouse operations by empowering on-site associates with daily tasks, including inventory replenishment, picking, sorting and packing.
The deal also gives Shopify access to the robotics experts who helped develop Amazon’s robotics business when they were at Kiva Systems (before Amazon acquired that company).
Shopify’s growth has skyrocketed in the past 12 months, with the e-Commerce platform’s stock jumping a whopping 150% in that time frame. After surpassing eBay’s market capitalization earlier this year (now up $40 billion to roughly $34 billion), Shopify is expected to pass eBay in terms of merchant sales volume in the U.S. as well, according to a note from investment bank R.W. Baird. Shopify reported $362 million in Q2 revenue last month, up 48% from the year-ago period.
The transaction is expected to have no impact on Shopify’s revenue in 2019, but is expected to increase the company’s annual expenses by approximately $25 million. The deal is expected to close in the fourth quarter of 2019.
Shopify estimated that 6 River Systems will have annual revenues of roughly $30 million in 2020.