Before Shipbob got into Y Combinator, raised more than $22 million in funding, expanded its logistics business to five warehouses across the U.S. and became one of Chicago’s hottest startups, it began as a couple of guys stopping people outside the post office.
In 2014 Dhruv Saxena and Divey Gulati, two childhood friends and immigrants from India, had an idea to help small companies ship their products more efficiently. Shipbob wanted to let companies automatically manage and fulfill orders from their online stores, and get items to customers with Amazon-like speeds—skipping the post office entirely. So, what better place to find potential customers than by camping outside the post office?
It was a tactic that got them occasionally chased away by security guards—and even banned by one Chicago post office—but it gave them a chance to meet entrepreneurs at one of their biggest pain points: wasting time in line shipping their goods.
“That’s how we got our first set of customers who are still with us today,” Gulati said.
With a handful of customers on board, Shipbob began using Saxena’s high-rise Chicago apartment to store clients’ products, stacking boxes throughout the tiny apartment. Fast forward four years, and the startup now helps thousands of brands with their e-commerce order fulfillment, and they’re no longer working out of Saxena’s home.
In fact, Shipbob now has five warehouses across the country—Chicago, New York, L.A., San Francisco and Dallas. In Chicago, Shipbob is planning to open a new Cicero warehouse in May that will be roughly 100,000 square feet, which is about five times larger than its current Chicago warehouse. Last month, Shipbob also moved into a new corporate headquarters in the West Loop, where it takes up about 20,000 square feet and holds around 100 employees. The startup has around 300 employees company wide, including warehouse staff.
The company declined to release specific revenue figures, but Saxena said that revenue has grown 300% year-over-year.
“The demand for Shipbob is high,” he said.
Shipbob works with e-commerce software like Shopify, WooCommerce, SquareSpace and others to handle the fulfillment process for small and medium-sized businesses, giving brands the tools to offer customers two-day delivery. When an order comes in, Shipbob picks, packs and ships the item, and its software helps companies track inventory and shipments from one dashboard. Brands using Shipbob include Paleo Scavenger, Jimmy Bars and Chicago startup Interior Define.
The startup has raised $22.5 million in venture funding, including a $17.5 million Series B last year from Bain Capital Ventures, Hyde Park Angels and Hyde Park Venture Partners. It’s also backed by Y Combinator, a sought-after tech accelerator in Silicon Valley. After getting accepted into YC in 2014, Shipbob decided to come back to Chicago to scale its business, rather than remain in the Valley. The city’s strength as a logistics hub, as well as the proximity to its early customers, pulled Shipbob back to the Midwest.
“The first few customers we had were in Chicago,” Saxena said. “That’s why we moved back.”
Shipbob anticipates opening two more warehouse locations this year, and it’s planning to add more employees at its Chicago headquarters, which has room for another 50 to 100 workers.
As Shipbob continues its fast-paced growth, the startup’s founders say they’re not only building the foundation of a great business for themselves, but also helping others grow their companies more efficiently.
“We’re realizing the American dream ourselves, and we’re helping these entrepreneurs realize their American dreams as well,” Gulati said.