- Ocado paid just $12.7 million to buy 6 River Systems from Shopify.
- Shopify paid $450 million for 6 River Systems in 2019.
- The 6 River Systems sale was part of a major pivot away from logistics by Shopify.
UK grocery giant Ocado paid just $12.7 million to acquire 6 River Systems from Shopify in May, according to Ocado’s mid-year financial report released July 18.
That’s $437.3 million less than what Shopify paid for it in October 2019. Ocado ultimately paid less than 3% of what Shopify paid for 6 River Systems less than four years ago.
The sale of 6 River Systems was part of a major pivot by Shopify that also included selling Deliverr and other parts of Shopify’s logistics business to Flexport.
The companies did not disclose the financial details of the 6 River Systems deal at the time of the announcement. The newly released figure in Ocado’s financial docs was first highlighted by the Robot Report.
Much of the 6 River Systems team was laid off along with the sale. Shopify also cut 20% of its overall workforce in May.
Founded in 2015 in Massachusetts, 6 River Systems built a robot meant to work in tandem with human pickers in warehouses. The robot, called “Chuck,” is currently being used by more than 70 customers in over 100 warehouses globally, according to Ocado’s report.
As Insider previously reported, Shopify’s acquisition of 6 River Systems kicked off a big logistics effort for the Canadian e-commerce company, which hoped to build up Shopify Fulfillment Network to compete with Amazon.
“It was so exciting because we thought, ‘This is the edge we need,'” a former developer in logistics previously told Insider. “We were going to take all of the logistics headaches that people need to worry about and just magic them away.”
But over time, staff questioned whether 6 River Systems was the boon they originally thought it would be since robotics wasn’t as useful for a smaller operation.
Shopify would later acquire Deliverr for $2.1 billion with the goal of creating a network of independent warehouses that would be tied together with software. But the integration of Deliverr didn’t go as planned, and by the beginning of 2023, the attitude toward logistics inside Shopify had shifted to palpable frustration, four people who worked for Shopify’s logistics division told Insider in May.
With the sale of both 6 River Systems and Deliverr, Shopify executives said it would be returning its focus to its “main quest” of building software for online sellers.
In his letter to shareholders, CEO Tobi Lütke called the entire initiative a “worthwhile side quest.”
“From the beginning, we worked with lots of partners on all aspects of this same problem: warehouses, robotics, transportation, crossdock, freight. We iteratively built a solution, step by step, through software, leases, and M&A deals, that could be an independent company one day,” Lütke wrote. “Shopify was the perfect place to bootstrap this effort from 0 to 1 and we have done this. The next step is to take what we have and take it from 1 to N as a main quest.”
Got a tip? Contact this reporter at email@example.com, firstname.lastname@example.org, or on the secure messaging app Signal at (646) 889-2143 using a non-work phone.