Yodel merger with Shift off the cards after £85m funding deal
A planned merger between Yodel and the logistics tech firm Shift is no longer on the cards after the parcel delivery giant unveiled an £85m funding package intended to quell concerns following its brush with bankruptcy earlier in the year.
Yodel was rescued from administration in February by executives from the logistics tech group Shift, led by founder Jacob Corlett, who formed a new company, YDGP, alongside Solano Partners.
But it has now been revealed that rapidly-growing Shift, which also picked up the pieces of delivery giant Tuffnells last June, will not be pursuing plans for a future merger with Yodel.
The status of that deal had been up in the air since Yodel’s rescue but it is not fully understood why it is no longer going ahead.
Yodel said it had carried out a “comprehensive strategic review” assessing its compatibility for a merger with Shift and Tuffnells earlier in the year, but had decided to operate as a “standalone entity,” under the continued leadership of boss Mike Hancox.
Yodel also revealed an £85m funding deal late Thursday, which is being supported by a consortium of investors including Paypoint and the lender, Independent Growth Finance.
Speaking on the new investment, Yodel, which was formerly owned by the Barclays family, said it would enable the business to further automate and modernise over the next few years.
In a statement, Mike Hancox said: “I am delighted that we have secured a funding package that gives Yodel financial security into the future and the ability to continue investing in the long-term success of the business.”
“I have to say thank you to my colleagues and our clients, who have been very supportive whilst Yodel has gone through a change of ownership, after many years with the Barclay family. We are excited to develop our Out of Home delivery offer and grateful for the support of the investors who will make this possible.”
City PM understands Shift has begun a restructuring process in a bid to prioritise its B2B operations. According to people familiar with the matter, some 20 jobs are being axed from the company as a result of the changes.
“In the last year, with support of our board and investors, it has become clear that the most significant, profitable and scalable opportunity lies in [Shift’s] B2B operations, using the technology, and this is how we plan to optimise value in the next phase of growth,” a spokesperson for Shift said.