Swedish home furnishings giant Ikea has taken a significant step to enhance its delivery capabilities by acquiring the U.S.-based logistics technology company Locus. The deal, finalized on Tuesday, aims to strengthen Ikea’s control over its delivery fulfillment network, a crucial aspect as the company adapts to rising online sales.
The acquisition, made by Ingka Group, the largest retailer for Ikea, involves an undisclosed sum. Notably, Locus had raised $50 million in funding in 2021, which elevated its valuation to $300 million at that time. This strategic move is expected to significantly bolster Ikea’s distribution efficiencies.
Tolga Oncu, head of Ikea Retail at Ingka Group, emphasized the alignment of this acquisition with the company’s commitment to enhancing the customer journey across all interactions. “By bringing Locus’s technology in-house, we’re taking control of a crucial element in our fulfillment chain, allowing us to deliver with greater speed and flexibility to the many,” he stated.
The Locus platform is known for its advanced capabilities, including fulfillment automation, route optimization, real-time tracking, and improved vehicle utilization. These features are anticipated to enhance operational efficiencies throughout Ikea’s supply chain, particularly in managing capacity and final-mile delivery. The company reported that online sales surged from 11% of total sales in 2019 to 28% in the previous year, highlighting the growing demand for robust home delivery solutions.
As Ikea primarily relies on third-party providers for home deliveries, this acquisition marks a pivotal shift by bringing an essential part of the fulfillment process in-house. Parag Parekh, global chief digital officer for Ikea Retail, noted that the acquisition not only strengthens the company’s digital capabilities but also enhances its ability to meet rising customer expectations while maintaining the quality and reliability for which Ikea is known.
This move follows other strategic acquisitions by Ingka Group to bolster Ikea’s distribution network. In 2023, the group acquired warehouse management software provider Made4net, and in 2017, it purchased the furniture assembly company TaskRabbit.
Ikea has committed over $2.2 billion in a three-year investment plan to enhance its omnichannel strategy, which involves opening new stores and expanding its fulfillment network. Following the acquisition, Locus will continue to operate independently, serving its existing enterprise clients alongside Ikea.
Locus Founder and CEO Nishith Rastogi expressed optimism about the partnership, stating that it “preserves our independence and ensures our perpetuity, while unlocking the scale and resources to serve our global enterprise customers with unmatched research and development.”
This acquisition positions Ikea to better navigate the evolving retail landscape, ensuring it can meet the growing demands of its customer base effectively.
