The 18 billion krona ($1.7 billion) merger of the Swedish last-mile delivery businesses Instabox and Budbee has been announced.
The two firms, which were both established in 2015 and are based in the Stockholm region, act as the logistics and delivery partners for well-known corporations, such as the global apparel retailer H&M. They provide home delivery services as well as automated lockers in key areas.
While Budbee services Sweden, Denmark, the Netherlands, Finland, and Belgium, Instabox operates in those same countries as well as Norway, Germany, Sweden, Denmark, and the Netherlands.
Instabox, which had received around $336 million since its founding and had achieved a $1 billion valuation thanks to additional fundraising, and Budbee, which had recently been valued at about $700 million, were amalgamated to arrive at the new entity’s $1.7 billion valuation.
Additionally, the combined firm will be named as Instabee, with Budbee co-founder Fredrik Hamilton serving as CEO and Instabox co-founder Alexis Priftis serving as Executive Chairman of the Board after the merger is finalised (pending clearance from the Swedish Competition Authority).
Despite the slightly various paths each business has taken since its inception, they have all ended up in about the same spot in terms of the services they provide and the markets they serve. Additionally, we’ve seen a growing push toward consolidation and belt-tightening in an industry that has grown more competitive in a turbulent economic environment.
For example, American grocery delivery giant Instacart recently cut its valuation by almost 40% to around $24 billion, and closer to home, Netherlands-based Just Eat Takeaway is scaling back in some markets and offloading its international ventures in pursuit of “more sustainable, profitable business models.”
Even though Instabox and Budbee compete in a different market from these businesses, they face the same difficulties. Given their shared histories, products, and target markets, it makes sense that they collaborate rather than go head-to-head for the same customers with other well-known brands and startup companies with venture capital backing.
Hamilton stated in a statement, “I have been long-term in my objectives from the beginning, and this relocation is a great opportunity to establish something genuinely serious. I’ve obviously kept a close eye on Instabox over the years, and I’m impressed with their progress.
Priftis went on to say that he thought this decision was “a terrific fit between two firms that have a lot of same principles.”
Along with prior sponsors including H&M, EQT, Creades, Verdane, and AMF, the creators of Instabox and Budbee will be Instabee’s top shareholders, along with the Swedish investment firm Kinnevik.