ShipBob raises $1M seed round, eyes launch in Brooklyn

by Doug Pitorak
April 29, 2015

[ibimage==46950==Original==none==self==ibimage_align-center]Chicago-based ShipBob is set to enter a second market, and it will have a nice sum of money to help out.

According to co-founder and CEO Dhruv Saxena, the on-demand shipping startup raised $1 million in seed funding today. Investors include SV Angels, Funders Club and WeFunder, as well as other angel investors, he said. The financing is a convertible loan.

With the funding, Saxena said ShipBob will launch this summer in Brooklyn, New York. In addition, he said ShipBob will use some of the funding to hire developers and engineers.

“Most of the small businesses who we are focusing and targeting to actually have warehouses in Brooklyn, so it just becomes a much more effective place for us to be in, instead of being in downtown Manhattan, which is mostly retail outlets and not the warehousing space for these businesses,” Saxena said.

When a business has something to ship, Ship Captains — independent contractors — come to the the storefront or warehouse and pick up the item(s). Once brought back to ShipBob’s warehouse, the item(s) are packaged. The ShipBob team then compares rates between the USPS, UPS, FedEx and DHL, ultimately selecting the most cost-effective option.

Also, the platform can receive orders directly from Shopify, eBay and Etsy stores. Furthermore, ShipBob can offer businesses a micro-warehouse, which can store popular products, allowing for more immediate shipment.

ShipBob, a participant of Y Combinator in the summer of 2014, launched publicly in September of last year. Saxena said ShipBob has seen success in Chicago.

“Ever since September, we’ve been growing at 35 percent to 40 percent month-over-month,” he said of the number of packages ShipBob ships.

Saxena said ShipBob works with about 200 businesses in Chicago and has shipped 40,000 packages since its inception.

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