Shopify reached an agreement to sell 6 River Systems, the warehouse automation firm, to Ocado Group. 6 River Systems offers to make fulfillment workflow effortless for the logistics and non-grocery retail sectors across Massachusetts, USA.
6 River Systems is known for its impressive combination of collaborative robots, artificial intelligence and operational expertise. The company also developed Chuck, an Autonomous Mobile Robot product that gives automated assistance to pickers in a warehouse, meanwhile working in collaboration with human operators.
Shopify has the privilege of being amongst the companies with the best chances of using AI to help our customers. A copilot for entrepreneurship is now possible. Our main quest demands from us to build the best thing that is now possible, and that has just changed entirely.
Tobi Lutke, CEO, Shopify
New Possibilities For Ocado
On this occasion, James Matthews, CEO of Ocado Technology, said, “We are delighted to welcome new colleagues to the Ocado family. 6 River Systems brings exciting new IP and possibilities to the wider Ocado technology estate, as well as valuable commercial and R&D expertise in non-grocery retail segments,” Ocado CEO James Matthews said in a release.
“Chuck robots are currently deployed in over 100 warehouses worldwide, with more than 70 customers. We’re looking forward to supporting 6 River Systems to build on these and new relationships in the years to come.”
According to a source of The Robot Report “the whole [6 River Systems] robotics team was axed and sold to Ocado.” “Shopify sold 2/3 of Shopify Logistics to Flexport and 6RS to Ocado. The Shopify Logistics leadership was a disaster,” the source said. The terms and agreements of the deal have not been disclosed.
Sale Of Deliverr To Flexport
Shopify CEO Tobi Lutke didn’t talk about the sale of 6 River Systems in his memo addressing 20 percent layoffs. However, he elaborately addressed the sale of Deliverr to Flexport. Shopify on May 4, 2023, announced its first-quarter 2023 financial results that surpassed Wall Street expectations while laying off 20 percent of its workforce.
In the press release, the company also mentioned that it has reached an agreement to sell its logistics business Deliverr to Flexport, a leading tech-driven global logistics platform. The acquisition includes services, technology and people working for the operations.
In the memo, Lutke emphasised the difference between the main quest of the company and the side quest which in this case is logistics. “Shopify’s main quest is to make commerce simpler, easier, more democratized, more participatory, and more common. I think that we have built the best commerce platform in the world for that. Technological progress always arcs towards simplicity, and entrepreneurs succeed more when we simplify. But now we are at the dawn of the AI era and the new capabilities that are unlocked by that are unprecedented. Shopify has the privilege of being amongst the companies with the best chances of using AI to help our customers. A copilot for entrepreneurship is now possible. Our main quest demands from us to build the best thing that is now possible, and that has just changed entirely,” read the memo.
“For the past year we’ve been subtracting everything that’s in the way of making the best possible product. This is extremely important, because we are heading into a decade of high velocity and massive change. We will require speed, agility, and a great deal of innovation,” he wrote.
When Shopify Acquired 6 River Systems
The Canadian e-commerce giant purchased 6 River System for $450 million in September 2019, paying 60 percent in cash and 40 percent. At the time of acquisition, Shopify termed it as a “critical step to accelerate its growth.”
6 River Systems is headquartered in Waltham, Massachusetts. It was founded in 2015 by Jerome Dubois and Rylan Hamilton, who previously worked at Kiva Systems now known as Amazon Robotics. The acquisition of 6 River Systems by Shopify was meant to support the logistics part of the business by offering automated 3PL to sellers. Shopify Fulfillment Network, 6 River Systems, and Deliverr together formed a broader logistics unit within Shopify led by Aaron Brown, CEO of Shopify’s logistics group. The fulfilment network operated on Deliverr’s software and technology developed by 6 River Systems
6 River Systems co-founder and Shopify Logistics VP Jerome Dubois told Brian Heater of techcrunch.com that the company entered into a deal with Shopify that enabled it to continue supplying systems to customers.
“We had a strong positive trajectory; we had strong investors. Everyone was really bullish on it. That’s not what it’s been. It’s been the opposite. We’ve been run independently from Shopify. We continue to invest and grow the business,” he said in the conversation that happened at the end of March.
