Ikea buys US logistics tech firm Locus to support online growth
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The news: Ikea said on Tuesday that it had acquired the US logistics technology company, Locus, to improve shopping and delivery smoother for customers.
The numbers: While the companies did not disclose the size of the sale, Locus was valued at USD300 million ($455 million) in its most recent funding round in 2021.
Ingka Investments, the investment arm of Ingka Group, the largest Ikea retailer, said that the acquisition comes as online sales represented 28% of Ikea’s total retail sales in FY24, up from 11% in FY19.
The context: Ingka added that the integration of Locus’s technology will help Ikea meet this online growth and will complement earlier strategic technology investments such as Made4net, which will help enhance the company’s warehouse management, and TaskRabbit, which expanded furniture assembly services.
The takeover comes in addition to the Ingka Group’s USD2.2 billion push as it competes with Wayfair and Walmart in the US.
Parag Parekh, chief digital officer at Ingka Group, said that acquiring Locus would simplify Ikea’s logistics and reduce its delivery expenses by an estimated EUR100 million a year globally.
Locus uses AI to group orders and predict routes that minimise the time delivery vehicles spend in traffic, a planning process that is currently done manually by Ikea workers, Parekh said.
