Meet UniUni, Shein’s last-mile solution delivered by gig drivers

When we talk about e-commerce logistics, we think of an industry controlled by entrenched players like Amazon, FedEx and national postal systems. At the start of the pandemic in 2019, a brave startup from Vancouver, BC decided to take on the incumbents with a new model — last-mile delivery using an Uber-esque network.

During the pandemic, the company, UniUni, managed to grow its business into the biggest last-mile delivery provider for fast fashion juggernaut Shein across North America. Its rapid growth drew investors’ attention, and today, UniUni announced the closing of CAD$100 million ($70 million) for the first tranche of its Series B financing.

UniUni expects to raise three more tranches for its Series B round by the end of 2023, the firm’s founder and CEO Peter Lu tells TechCrunch in an interview. Lu declines to disclose the target amount for the entire round but says it will be a “substantial” amount. While the founder keeps a tight lip on the firm’s valuation, he says the goal is to hit the $10 billion unicorn valuation by 2025.

UniUni’s early-day momentum was a result of luck and grit. When COVID-19 hit and kept hundreds of millions of people at home, e-commerce sales soared, straining delivery networks around the world. At the time, UniUni was an underdog in the competitive restaurant delivery race. A logistics firm that shipped e-commerce products from China to Canada happened upon one of its contract vehicles in Vancouver and asked if the company wanted to help drop off a few parcels in the neighborhood. UniUni said yes, and before long, the one-off project grew into a long-term partnership.

From there, UniUni stumbled upon a new way of powering last-mile delivery. Traditionally, online retailers lean on courier express services and postal networks to transport goods from warehouses to customers’ doorsteps. The issue with the model, argues Lu, is that neither system is designed for the speed or volume of e-commerce. Consumers either have to wait two weeks or pay a steep price for faster delivery.

UniUni is offering what it claims to be faster, cheaper last-mile solutions through its pool of gig drivers, or in Lu’s words, “crowdsourced drivers.” When its first client approached it off the street of Vancouver, UniUni already had an existing network of contract drivers, so it didn’t take long for it to figure out the model had sustainable unit economics. Naturally, the startup pivoted from delivering meals to e-commerce purchases.

“The last-mile delivery market has imperfect competition, meaning there are barriers to entry,” says Lu, who studied computer science at Shanghai Jiaotong University and moved to Canada two decades ago. “We thought there were still opportunities in this space.”

UniUni

Today, UniUni boasts more than 6,000 drivers across Canada and a few hundred in the U.S., where it recently started operating. It has an ambitious goal to surpass 200,000 packages per day and generate $100 million in revenue in 2023. By the end of this year, the company aims to be profitable in Canada.

The founder is confident about his projections as he sees clear advantages in UniUni. For one, using flexible workers rather than full-time staff greatly reduces labor costs. Compared to traditional courier services, the startup has a much denser network of distribution facilities, which helps shorten its delivery time. And because it’s platform-agnostic, UniUni can group orders from various clients — be it Amazon, Shein or the up-and-coming app Temu — to work out the most efficient delivery route and schedule for drivers.

The setup, Lu says, means UniUni is able to deliver as fast as DHL but for less than half its price. The company helped Shein shorten its delivery time from 10-14 days to just four to five days, the founder claims.

Lastly, the startup’s network in China is indispensable to its early-day development. In the e-commerce era, made-in-China goods continue to fill Western households, thanks to the rise of Chinese e-commerce sites serving overseas users and a streamlined cross-border logistics network that Chinese companies set up over the past decade. UniUni is working closely with some of the largest cross-border logistics solution providers, such as Yanwen Express and Zongteng Group, which both participated in the startup’s 50 million yuan ($7 million) Series A funding round.

For its Series B, UniUni focused on seeking financial rather than strategic investors. The lineup included GrubMarket investor Celtic House Venture Partners, BRV Aster, Freshwave Capital, Hat Trick Ventures and Vision Plus Capital. Proceeds from this new round will go toward its expansion to major U.S. cities like Los Angeles, New York, Chicago, Dallas and Miami. The company has a team of 250 employees, with a dozen of them in the U.S.

One must wonder how UniUni keeps its costs low in a state like California, where gig workers’ rights are under constant legislative debate. Lu admits if drivers gain full employment status, the firm’s costs will increase. But he’s not too worried about the impact of the potential regulation because “we know exactly how many parcels we are delivering per city. It’s just a matter of when we break even. It might be three months before, now it will just have to be four months.”

Meet UniUni, Shein’s last-mile solution delivered by gig drivers by Rita Liao originally published on TechCrunch