Flexport was last valued at $8 billion in a $935 million funding round led by Andreessen Horowitz and MSD Partners in February 2022.

Shopify has also sold 6 River Systems, another retail fulfillment automation startup it paid $450 million for in 2019, to British online supermarket technology provider Ocado for an undisclosed amount, the Toronto-based company said. The move to expand into logistics services was part of Shopify's ambition to support merchants selling on its platform with one-stop service.

As the e-commerce boom brought by the global pandemic subsides and Shopify's revenue growth slows, its spending in the fulfillment network has been more closely scrutinized by investors, who worry the capital-intensive project could weigh on earnings. Shopify President Harley Finkelstein said the shift in strategy was a result of prioritizing product acceleration. "We can give our merchants great value. Flexport gets tons of new customers to use their incredible product and we can go back to focusing on what we do best," he said in an interview.

San Francisco-based Flexport will expand into fulfillment and last-mile delivery through the deal as the official logistics partner for merchants on Shopify. Flexport, led by former Amazon executive Dave Clark, will provide fulfillment services to stores and homes through over 50 fulfillment sites across the country following the deal, competing head to head with Amazon.com Inc. "We want to move toward end-to-end solution under one technology stack, from manufacturer to store door, and this really accelerates our journey there," Clark said. "We expect to use this as a real catalyst for growth."

(Reporting by Krystal Hu in New York; Editing by Jamie Freed)

By Krystal Hu