Shopify set to acquire 6 River Systems for $450 million

Earlier this week, Ottawa-based Shopify, a multi-channel commerce platform, announced that it has reached an agreement to acquire Waltham, Mass.-based 6 River Systems, a provider of collaborative warehouse solutions.

The purchase price is $450 million, and the acquisition is expected to be made official in the fourth quarter. More than 130 6 River Systems employees will join Shopify as part of the acquisition.

Established in 2015, 6 River Systems was founded by Jerome Dubois, Rylan Hamilton, and Chris Caciopppo, with Dubois and Hamilton previously serving on the executive team of Amazon Robotics, which was formerly known as Kiva Systems. 6 River Systems offerings are in operations at more than 20 United States-, Canada-, and Europe-based facilities, where it fulfills millions of units per week for large shippers and logistics services partners, including Lockheed Martin, DHL, XPO Logistics, and Office Depot, among others. Shopify officials said 6 Rivers Systems is expected to generate $30 billion in annual billings in 2020.

And they added that by bringing 6 Rivers Systems into the fold Shopify will gain a group of staffers with decades of fulfillment software and robotics experience, as well as 6 Rivers Systems’ cloud-based software and collaborative mobile robots, known as “Chuck,” to the Shopify Fulfillment Network. This pairing, said Shopify, will increase the speed and reliability of warehouse operations through various tasks such as inventory replenishment, picking, sorting, and packing.  Shopify also explained that that this acquisition is a “critical step to accelerate its growth,” with 6 River Systems continuing to build and sell their offerings for warehouses.

The Shopify Fulfillment Network was introduced by Shopify in June. Its primary objective is to provide United States-base merchants with a network of distributed fulfillment centers, coupled with machine learning to ensure timely deliveries and lower shipping costs, putting their brand and customer experience front and center.

A Shopify spokesperson told LM that the Shopify Fulfillment Network is designed to provide timely deliveries, lower shipping costs, and superb customer experience for merchants and their customers, adding that this acquisition is a critical step to accelerate its growth. 

“Shopify and 6 River Systems have a shared vision to change the game in fulfillment, by applying the best technology to help companies of all sizes compete,” said the spokesperson. “Our plan is that logistics providers that work with Shopify will have the option to leverage the 6 River Systems technology as part of the Shopify Fulfillment Network. We expect that our partners will be eager to adopt this new technology to make their fulfillment operations more efficient. We often talk about Shopify as a retail operating system for our merchants; 6 River Systems will become a warehouse operating system for entrepreneurs and businesses all around the world.”

Executives from both Shopify and 6 Rivers Systems were bullish about the future prospects of this acquisition.

“Shopify is taking on fulfillment the same way we’ve approached other commerce challenges, by bringing together the best technology to help everyone compete,” said Tobi Lütke, CEO of Shopify, in a statement. “With 6 River Systems, we will bring technology and operational efficiencies to companies of all sizes around the world.”

In a Wall Street Journal report, Lütke noted that Six River Systems is pushing further into fulfillment and distribution to help small- and medium-sized business access those things more quickly, adding it is tricky to scale a retail business and deliver product quickly across the continent.

And Jerome Dubois, co-CEO and co-founder of Six River Systems said that with his company becoming part of Shopify it is, in a sense, changing fulfillment.

“Together, we will help thousands of businesses improve their fulfillment operations, with an easy-to-learn solution that can more than double productivity and improve accuracy,” he said.