Ian Hogarth and Taavet Hinrikus’ Plural VC has led a $35m (£27.6m) round in ecommerce logistics startup Relay.
The new capital will be used by the company to build out its AI and machine learning capabilities as it aims to reduce costs in online shopping delivery.
Retailers lose over $18bn a year in potential sales due to shopping cart abandonment, largely driven by delivery costs, according to market research firm Forrester.
London-based Relay claims these lost sales are caused by outdated delivery networks that have not adapted beyond brick-and-mortar retail.
The startup has built a “decentralised delivery model” made up of hyperlocal nodes that it claims reduces the overall shipping distances, consolidates deliveries and cuts operating expenses.
Relay uses AI to assign parcels, fine-tune route pricing and calculate the minimum travel distance required, it claims it can reduce delivery distances by up to 95% more than existing systems.
“Logistics isn’t a transportation challenge – it’s a psychological problem grounded in complicated mathematics,” said Jonathan Jenssen, co-founder and CEO of Relay.
“At Relay, we’re using technology to build critical logistics infrastructure that brings down costs while improving delivery speed and reliability. We’ve already proven this model with some of the UK’s largest ecommerce retailers, and with support from our partners and investors, we’re ready to scale our network across the country and beyond.”
Customers of Relay include THG, My Protein and Glossybox.
Relay also offers an automated workflow management platform for ecommerce retailers.
Relay previously raised £8m in a funding round in 2023.
“There is a global opportunity to reinvent parcel delivery for the digital age. Jonathan and Nicole are the perfect pair to do this, having lived and breathed the last-mile delivery revolution for almost a decade, said Hinrikus, who is also the co-founder and former CEO of Wise.
“Their asset-light model, optimised by AI, is already leading to delivery times that are a fraction of incumbents. I look forward to working with them closely to build an ambitious new delivery platform.”
Hinrikus founded Plural with Hogarth and Sten Tamkivi in 2022 with the goal of launching a founder-led investment firm that understood the needs of tech entrepreneurs. Last year, Plural launched a £343m investment fund.
Other investors in Relay’s latest funding round include Project A and Prologis Ventures.
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