eBay buys Shutl, expands same day delivery service

eBay Now is available in Chicago and Dallas, coming to 25 cities, including London, by 2014

With competition from Google breathing down its neck, eBay has decided to really step up its same-day delivery service with a big new purchase and a slew of new features.

The company expanded its eBay Now service to Dallas and Chicago on Tuesday, and announced that it planned to be in 25 markets by the end of next year, including London. And, to facilitate this, it has acquired London-based same-day delivery company Shutl.

No financial terms of the deal were disclosed, but Tom Allason, founder and CEO of Shutl. revealed in a blog post that the service will remain open, and continue to serve customers in both the United States and United Kingdom.

He called being purchased by eBay, "a doorway to a much greater opportunity." 

"We will be speeding up our national and international roll-outs and increasing our investment in new product development," said Allason. "In short, we will be working harder than ever to make our service faster, better and more accessible for consumers around the world."

Founded in 2009, Shutl works with a network of same-day local courier companies, so when an order is placed, its technology finds the courier company that would be ideal for that delivery.  The carriers can compete for deliveries by flexing their pricing options, but Shutl also emphasizes quality service, so carriers that have performed well in the past get higher priority.  The customer is then given a delivery price quote.

The company raised just under $9 million, including a $2 million investment in August 2012 from UPS Strategic Enterprise Fund, Hummingbird Ventures, and others, followed by $3.2 million in a round of financing led by new investors e.ventures and Notion Capital. 

"The company believes that the acquisition of Shutl’s technology, talent and expertise will help eBay to reach its goal of expanding its local delivery capabilities," eBay said.

In addition to the Shutl purchase, eBay also announced some new features for its platform.

They include in-store pickup, which allows customers to buy online and then go to a store to pick up their item. It is launching on Tuesday with Toys “R” Us and Best Buy, and will add new retailers soon. The company is also adding scheduled delivery, as well as same-day delivery for local goods on eBay.com.

eBay Now, which was launched last year, was only available San Francisco, San Jose and New York upon its initial launch, but was expanded to the Bay Area Peninsula, Brooklyn and Queens in July.

Some of the retailers it works with include Finish Line, GNC, Home Depot, Macy's, Office Depot, RadioShack, Target, Toys R Us, and Walgreens.

The same-day delivery space

These new features, and expansion, put eBay in a good position against Google, which unveiled its own same-day delivery service back in March.

Initially only available in certain sections of San Francisco, it was recently expanded to the entire Bay Area. Some of the retailers Google is working with include Target, Walgreens, Staples, American Eagle, Toys R Us, and Babies R Us, as well as local stores such as San Francisco’s Blue Bottle Coffee, Raley’s Nob Hill Foods, and the Bay Area’s Palo Alto Toy & Sport.

Amazon Prime is probably the competitor to beat, though, especially since it comes with access to unlimited TV episodes and movies at no extra cost, and only costs $79 a year.

There are also smaller companies that are dedicated only to same-day delivery, such as Deliv, which closed a $1 million funding round in March, before raising another $6.85 million Series A funding round in September. 

With this big, national and international expansion, eBay has jumped out ahead of the competition in a major way.

(Image source: https://shutl.com)