Target has announced that it has reached an agreement to acquire same day delivery startup company Shipt for $550 million. Target, the second-largest discount store retailer in the United States only behind Walmart, looks to use the company to build out its delivery service.
Shipt was founded in 2014 and has grown astonishingly in size and valuation and today it serves about 20,000 customers through partnerships with various retailers such as Publix Super Markets Inc., Kroger Co. and Costco Wholesale Corp.
Due to the acquisition, starting in the early months of 2018, same-day delivery will be possible in about half of Target’s 1834 stores. It is expected that by the end of 2018, same-day delivery services will be available at the vast majority of Target’s markets.
The cost of the service will be $99 a year for unlimited deliveries. The same day deliveries available will initially be limited to groceries, electronics and household essentials before it later expands to all products by 2019.
The acquisition makes it one of Target’s largest in its history thus far. It is perhaps the biggest indication yet that Target means business when it comes to keeping up with their competition, the likes of Wal-Mart, Amazon and Best Buy who have already had the same-day delivery service available for some time.
Target had already made a strong statement of intent earlier when they acquired Grand Junction earlier this year, which is a software company that also manages local and same-day deliveries.
Target’s chief operating officer, John Mulligan, spoke in his statement with great optimism in regards to the impact that the acquisition may have “With Shipt’s network of local shoppers and their current market penetration, we will move from days to hours, dramatically accelerating our ability to bring affordable same-day delivery to guests across the country” he said.
-This story was originally seen on Startup Beat.