Dive Brief:
- Part of a larger digital transformation strategy, Ingka Group’s investment arm has acquired U.S.-based AI logistics technology company Locus for an undisclosed amount, per a company announcement Tuesday.
- The largest Ikea retailer aims to use Locus’ platform — which includes advanced route optimization, real-time tracking, and more — to improve its delivery offerings. Up until this deal, Ikea was relying on multiple third-party providers.
- Locus will remain operationally independent following the deal and will continue to grow its services to clients beyond the Ingka Group.
Dive Insight:
For Ingka Group, bringing this logistics expertise into the company is all about control.
“This acquisition aligns perfectly with our commitment to improving the customer journey at every touchpoint,” Head of Ikea Retail at Ingka Group Tolga Öncü said in a statement. “By bringing Locus’s technology in-house, we’re taking control of a crucial element in our fulfilment chain, allowing us to deliver with greater speed and flexibility to the many.”
The move builds on other digital investments from Ingka Group, which have included the 2023 acquisition of Made4net to help with warehouse management and the 2017 purchase of at-home assembly company TaskRabbit. Ingka Group said in its announcement Tuesday that online sales made up 28% of total Ikea retail sales in fiscal year 2024, representing an 11% increase from fiscal year 2019.
For Locus, the decision to join Ingka Group was about autonomy and resource access.
“This partnership preserves our independence and ensures our perpetuity, while unlocking the scale and resources to serve our global enterprise customers with unmatched research and development,” Locus founder and CEO Nishith Rastogi said in statement. “To usher in this new phase, we will expand significantly across product, engineering, and revenue teams, to build a legacy of innovation and impact spanning decades, not years.”
The AI-powered company says on its website that in 2015, it was founded in a studio apartment and registered under a different name. In 2016, Locus raised about $2.75 million in a series A funding round led by Exfinity Ventures and Growx Ventures.
Ingka Group’s acquisition of Locus represents a growing interest in utilizing AI in the retail industry. Walmart has been looking to it to scale its supply chain, Amazon recently announced it would use AI to help sellers manage shipments and Lululemon created a new AI executive role to quicken its product innovation speed.
