Logistics startup Shyp shuts down, citing expansion problems

With so much excitement in the rapidly innovating logistics sector, not every startup that emerges can ultimately meet the sector’s challenges. Most recently, Kevin Gibbon, CEO of ship-on-demand start-up Shyp, announced last week that the company had ended operations.

Launched in 2014 in San Francisco, Shyp attracted substantial investor interest, to the tune of US$62.1 million by April 2015. However, the startup, which aimed for a one-size-fits-all service allowing customers to book a pickup and delivery for items instantly through a Shyp mobile app, struggled to expand outside of its core San Francisco market and maintain a profit.

During the summer of 2017, to keep the struggling company’s head above water, Gibbon made the decision to suspend operations in all markets except San Francisco. While the move reduced Shyp’s losses, it was not enough to rescue the company. Gibbon attributed the majority of Shyp’s struggles to the early decision to target consumer shipping for growth.

“About two years ago, we reallocated resources and shifted our focus to a more profitable customer cohort: small businesses,” he said. “But, we decided to keep the popular-but-unprofitable parts of our business running, with small teams of their own behind them.” This move, Gibbon noted, “was a mistake – my mistake.”