Deliverr’s nearly flat exit price isn’t as bad as it looks – Marketingwithanoy

The leading story In tech lands, this morning marks the multi-billion dollar exit of Deliverr, a San Francisco, California-based e-commerce fulfillment startup, to e-commerce giant Shopify.

At first glance, the deal looks like a clear win. What startup wouldn’t want to leave for billions of dollars for a company growing as fast as Shopify? But if we compare Deliverr’s exit price of $2.1 billion to the final private price of $2.05 billion set early last year (Crunchbase data), the deal gets a little trickier to analyze.

After all, no company wants to leave for a fixed price, because this implies that the most recent investors are putting their money to work for a certain period of time with no return. Given the time value of money, or in this case the cost of time, locking up funds at a time when interest rates and inflation both going up for zero up is actually a loss.

However, late-stage deals are so nuanced that we can’t just peek from the topline numbers. Perhaps Deliverr’s latest round in 2021 included provisions ensuring that the most recent investors would receive a certain minimum return in the event of a sale.

If so, the deal could squeeze previous investors and minor shareholders, such as employees, out of some of the value of their shares. If the deal had more fat on the bone, we wouldn’t have to speculate about late-stage terms and their potential impact.

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