- PAX has five cross-docking centers in operation in Brazil;
- The startup will focus on expanding the first mile, accelerating the different pillars of logistics at Olist.
The Brazilian startup Olist, which operates sales solutions for e-commerce, announced on Monday the acquisition of the logistics startup PAX, to expand cross-docking activities by six times (a distribution system where the product is dispatched to a distribution center and redistributed to the consumer immediately). The transaction amount was not disclosed, but it was partly in cash and in stocks.
In talks with LABS, Eduardo Ferraz, Olist’s CFO, explained that PAX’s founders will integrate Olist with leadership roles on logistics and technology, as they formerly did in PAX. Overall, 60 new employees are already working with Olist’s teams.
It is the second startup acquisition in less than a month. In November, Olist received a round of BRL 310 million led by SoftBank Group and announced the acquisition of Clickspace, of solutions for marketplaces.
Olist’s CMO, Saulo Marti, told LABS in November that the investment would be used in strategic mergers and acquisitions, which are part of the company’s expansion plan. According to Olist, the acquisition of PAX also strengthens the brand’s presence in the e-commerce and marketplaces segment.
PAX has five cross-docking centers in operation in the cities of São Paulo, Rio de Janeiro, Curitiba, Belo Horizonte, and Porto Alegre, where it already collects from Olist’s sellers and take the products to the cross-docking center, to do a last-mile using market operators such as Loggi, Jadlog and Correios, besides PAX itself, as a last-mile collaborator.
With the acquisition, Olist plans to close 2021 with 30 new hubs in the main cities of the country and become the pioneer in collecting daily orders. Ferraz explained that with a logistics and convenience service Olist can deliver in one to three days, when before the product would take seven to 10 days deadline.
According to Ferraz, PAX does not operate only for Olist. It is a carrier for third parties, with other customers such as supermarket chains Pão de Açúcar and Carrefour. “We will keep orders from third parties. PAX will have a double role in our ecosystem, it will be both complementary to our Olist Shops and Olist Store sales solutions, as well as serving the market. The firm is competitive, we will expand this performance to external customers starting next year,” he said.
After a year and nine months of operation, PAX will focus on expanding the first mile delivery, accelerating the different pillars of logistics at Olist, and enabling integration with other operators. The objective is to help the merchant to sell more, starting by reducing delivery time, a decisive factor when making purchases. PAX is an “Uber of logistics” alike platform, with 4,000 registered drivers, that joins demand from retailers to the available drivers.
“We are going to increase our production capacity to hundreds of thousands of orders per month. This M&A will have a considerable impact on our business as a whole due to the efficiency in the delivery time, we can be even more competitive to deliver the best experience for the consumer and generate value for our partners,” said Tiago Dalvi, CEO at Olist, in a press statement.
The acquisitions should not stop there. According to Ferraz, one of the startup’s priorities is the dynamics of acquisitions in markets and products that make sense for the business, and available players usually are the SMEs, since the acquisition deal is boldest when the firm is bigger (and demands Brazil’s Central Bank and Brazil’s antitrust watchdog approval).
According to the startup, freight can be an obstacle to the completion of purchases. Olist cites that surveys by Facebook show that 90% of consumers said they care about the time it takes for products to be delivered and 71% said they were dissatisfied with the value of shipping.
“In times of expressive growth in e-commerce, it is necessary to be aware of all the differentials that companies can offer a memorable shopping journey. The use of technology in logistics bringing, for example, product traceability is essential, both for the consumer and for the company, and the know-how of Olist and PAX are in line with this strategy ”, points out Dalvi.
*This story was updated to correct an error, it was SoftBank Group that led the infusion and not Valor Capital Group