Shopify lost $437 million when it sold its robotics division 6 River Systems, financial documents show

• Ocado paid just $12.7 million to buy 6 River Systems from Shopify.
• Shopify paid $450 million for 6 River Systems in 2019.
• The 6 River Systems sale was part of a major pivot away from logistics by Shopify.

According to Ocado’s mid-year financial report released on July 18, the UK grocery giant Ocado paid only $12.7 million to acquire 6 River Systems from Shopify in May.

That’s $437.3 million less than Shopify paid for it in October of this year. Ocado ended up paying less than 3% of what Shopify paid for 6 River Systems four years ago.

The sale of 6 River Systems was part of Shopify’s major pivot, which included the sale of Deliverr and other parts of Shopify’s logistics business to Flexport.

The financial terms of the 6 River Systems transaction were not disclosed at the time of the announcement. The Robot Report first brought attention to the newly released figure in Ocado’s financial documents.

The sale resulted in the layoff of a large portion of the 6 River Systems team. Shopify also reduced its overall workforce by 20% in May.

6 River Systems, founded in 2015 in Massachusetts, developed a robot designed to work alongside human pickers in warehouses. According to Ocado’s report, the robot, dubbed “Chuck,” is currently being used by more than 70 customers in over 100 warehouses worldwide.

As previously reported by Insider, Shopify’s acquisition of 6 River Systems marked the beginning of a large logistics effort for the Canadian e-commerce company, which hoped to build up the Shopify Fulfillment Network in order to compete with Amazon.

“It was so exciting because we thought, ‘This is the edge we need,'” a former logistics developer told Insider previously. “We were going to take all of the logistical headaches that people have to deal with and just magically remove them.”

However, as time passed, employees began to question whether 6 River Systems was the boon they had anticipated, because robotics were not as useful for a smaller operation.

Shopify would later acquire Deliverr for $2.1 billion with the intention of establishing a network of independent warehouses linked together by software. However, the integration of Deliverr did not go as planned, and by the beginning of 2023, the attitude toward logistics within Shopify had shifted to palpable frustration, according to four people who worked for Shopify’s logistics division in May.

With the sales of 6 River Systems and Deliverr, Shopify executives stated that the company would return its focus to its “main quest” of developing software for online sellers.

In a letter to shareholders, CEO Tobi Lütke described the entire initiative as a “worthwhile side quest.”

“From the start, we collaborated with a large number of partners on all aspects of this same problem: warehouses, robotics, transportation, crossdock, and freight.” “Through software, leases, and M&A deals, we iteratively built a solution that could one day be an independent company,” Lütke wrote. “Shopify was the ideal place to bootstrap this effort from 0 to 1, and we did it.” The next step is to take what we have and turn it into a main quest from 1 to N.”