The two companies, both founded in 2015 in the Stockholm area, serve as delivery and logistics partners for major brands, including multinational clothing retailer H&M, offering direct home delivery services as well as automated lockers in strategic locations.
Instabox operates in Sweden, Denmark, the Netherlands, Norway and Germany, while Budbee operates in Sweden, Denmark, the Netherlands, Finland and Belgium.
Instabox had raised approximately $336 million since its inception, and recently reached a valuation of $1 billion from the back of another round of financing, while Budbee was recently valued at about $700 million, and that’s how the new combined entity came to its valuation of $1.7 billion. In addition, when the merger is completed — still requiring approval from the Swedish competition authority — the company will be known as Instabee, with Budbee co-founder Fredrik Hamilton taking on the role of CEO and Instabox co-founder Alexis Priftis executive chairman of the board of directors.
While the paths each company has taken since their inception have been a little different, they’ve landed in roughly the same place in terms of the types of services they offer and the markets they operate in. In addition, in what is an increasingly competitive industry in a turbulent economic landscape, we have seen growing pressure towards consolidation and wallet tightening, most recently with US supermarket delivery giant Instacart among others. reduction in valuation by almost 40% to about $24 billion, and closer to home, Netherlands-based Just Eat Takeaway is scaling back in some markets and offloading its global businesses in the pursuit of “more sustainable, profitable growth.”
Although Instabox and Budbee operate in a different market than these companies, the challenges remain the same – and given how closely aligned they are in terms of history, product and markets, it makes sense that they would come together rather than compete for the same. dollars with each other as well as with other established players and venture capital backed newcomers.
“I have been working on my plans since the beginning and this move is a great opportunity to create something really substantial,” Hamilton said in a statement. “Of course I have followed Instabox closely over the years and am impressed by their journey.”
Priftis added that he saw this move as a “good match between two companies that share many common values.”
The founders of Instabox and Budbee, along with Swedish investment company Kinnevik, will be the largest shareholders of Instabee, along with past backers including H&M, EQT, Creades, Verdane, AMF.