In an increasingly Uber-dominated world, mobile apps that allows you to order a service on-demand are disrupting everything from transportation, to grocery shopping, to health. Shyp is aiming to take on shipping, allowing consumers to ship anything to anywhere in the world, from an app on your phone.
Kleiner Perkins is taking a big bet on Shyp, leading a $50 million funding round in the company, with the firm’s partner and legendary investor John Doerr joining Shyp’s board of directors. Past Shyp investors Homebrew and Sherpa Ventures also contributed to the round, in addition to independent investors such as Digg founder Kevin Rose and Rent The Runway CEO Jennifer Hyman, among others. Fortune has learned that the post-money valuation for the company is above $300 million.
Shyp CEO and founder Kevin Gibbon, who made six figures in college by being a power seller on eBay (EBAY), has been thinking about this idea for awhile. Shipping was a tedious process when he was selling, and there needed to be a solution to avoid waiting in long lines at the post office, or shipping stores.
The premise behind Shyp is simple. You take a picture of the item you need to be shipped, enter the shipping address, and the company will send one of its “Shyp Heroes” to pick up the item at your home or location. Shyp will then package the item, choose which shipping method—FedEx (FDX), UPS (UPS), or the U.S. Postal Service—is most cost-effective, and will ship the package for you.
Consumers don’t need to wait in line, but they do incur flat $5 fee for each order (which could include multiple shipments). The app also includes an in-app estimator that will estimate the cost of shipping before you use Shyp.
Shyp makes most of its revenue through negotiating discounted shipping costs with FedEx and UPS. While Shyp pays a fraction of the shipping cost passed onto consumers, users are always quoted the same, lowest prices they would find if they shipped through FedEx, UPS, or the Postal Service.
Shyp is currently available in San Francisco, New York City (Manhattan and Brooklyn), Miami, and Los Angeles. And Shyp will send items to anywhere in the U.S. and internationally.
“In the way that Uber has transformed transportation in cities, this is going to change shipping,” said Doerr in an interview. The market is massive he says, with the logistics and delivery industry worth around $220 billion, including the annual revenue from companies like FedEx, UPS, DHL, and USPS. Part of what attracted the firm toe Shyp was the fact that it has done little to no marketing, but it has grown as rapidly as many popular on-demand services, he adds.
The company’s tens of thousands of users is modest, but engagement is notable. The number of shipments have increased by nearly 500 percent since last year, and customer growth is surpassing 20 percent month-over-month.
For Kleiner, Shyp fits into one of the three waves of disruption taking place in the technology industry, Doerr explains. In addition to expansion of social and the ubiquity of mobile, the third leg is the intersection of social, local and mobile. Kleiner investments in these areas include Uber, grocery delivery startup Instacart, restaurant delivery startup DoorDash, and now Shyp.
One vertical where Shyp is placing its bets is in making returns for purchases made online seamless for consumers. Shyp allows people to return items to a number of large retailers, including Amazon (AMZN), Gap, J.Crew and Nordstrom, with the simplicity of entering an order number, or including the shipping label from the order. Gibbon explains that the order number for online purchases acts almost like a social security number for purchases, so it’s easy for Shyp to ensure that returns are directed to the right place even if the purchaser doesn’t have a pre-paid label.
Should UPS and FedEx be worried? Doerr says he’s talked to high level executives at both companies, and the shipping giants see Shyp as a “complimentary network.” Gibbon agrees, and sees these companies as partners.
The company will be using the funding for US expansion and for developing deeper partnerships with retailers, Gibbon says, especially those who betting on newer technologies to engage their customers.
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