- Reef has acquired Bond for an undisclosed sum.
- The startups have been offering ultra-fast delivery together since 2020.
- The acquisition will “unlock the full potential” of Reef’s 5,500 parking lots, according to the CEO.
- See more stories on Insider’s business page.
Reef Technology, a Softbank-backed company that turns parking lots into ghost kitchens and logistics hubs, has agreed to acquire its logistics partner, Bond, for an undisclosed sum.
Reef, which is the largest parking lot operator in the US, raised a $700 million round from growth equity investors including Softbank in November. Just after the pandemic explosion in e-commerce, Reef and Bond teamed up in a few locations – two in New York and one in Philadelphia.
The move is a sign that Reef and Bond’s hyper-local delivery is quickly growing beyond food at a time when online sellers are scrambling for every bit of last-mile delivery capacity. UPS CEO Carol Tomé predicts the US will be 5 million packages per day short of delivery capacity this holiday season. So same-day services like Reef’s are rushing into traditional package logistics.
Bond specializes in turning non-traditional spaces into micro-fulfillment centers for e-commerce, in some cases using specially fitted trailers and delivering with electric tricycles. The company raised $15 million in 2020, just before the pandemic exploded demand for e-commerce fulfillment and delivery services.
At first, Reef was simply a real estate provider for Bond’s “nano-warehouses,” but after six months the two companies combined services. The acquisition became a natural next step, Bond cofounder and Chief Revenue Officer Michael Osadon told Insider.
Bond also brings the tech to make its fulfillment centers easy for small businesses to access and use, which Reef execs say will unlock the next phase of their fulfillment service.
Bond’s technology will now be the operating system for Reef’s fulfillment service across 5,500 locations in 30 metro areas, covering 70% of the US population with delivery speeds from next-day to 10 minutes.
Delivery this fast is a staple of the restaurant world, but it’s spreading to the rest of e-commerce as gig platforms link up with retailers at an increasing clip.
Philippe Saint-Just, Reef cofounder and SVP of product, calls his company’s value proposition “proximity as a service.” Most of its employee drivers make deliveries within five miles of the fulfillment facility, he said.
Saint-Just said the key to Reef’s efficiency is controlling fulfillment and delivery, and having employees instead of gig workers. He said Reef ruled out the gig economy early on since it wanted each fulfillment center team to get to know their territory.
The company delivers for online grocer Fresh Direct in New York City and fulfills nationwide orders for restaurants like Wendy’s. The Bond acquisition will allow smaller companies and even individuals within the “creator economy” to access Reef’s hyperlocal fulfillment and delivery services, while expanding its nationwide capabilities beyond food.
“The distinction between the restaurant industry and the retail industry has gotten somewhat slim,” Saint-Just said. “The shift in paradigm is really getting the customer what they want when they want it.”