IKEA buys US logistics tech firm Locus in online growth push

IKEA has acquired U.S. logistics expertise firm Locus, the 2 corporations mentioned on Tuesday, a deal the Swedish furnishings retailer mentioned would make its deliveries to consumers smoother and quicker because it invests to increase online gross sales.

The takeover is in addition to a $2.2 billion push by Ingka Group, the most important world IKEA franchisee, in the U.S. the place it competes with Wayfair and Walmart and can be contending with larger tariffs on imports which might be rising its prices.

IKEA declined to reveal the worth of the deal. Locus was valued at $300 million in its most up-to-date funding spherical in 2021, in response to reviews on the time.

IKEA mentioned buying Locus would simplify its logistics and scale back its supply bills by an estimated 100 million euros ($117.41 million) a 12 months globally.

Locus makes use of synthetic intelligence to group orders and predict routes that reduce the time supply autos spend in site visitors, a planning course of that’s presently achieved manually by IKEA staff, Parag Parekh, chief digital officer at Ingka Group instructed Reuters in an interview.

Locus may even allow IKEA to supply clients extra supply home windows and choices, and provides stay updates on the place their package deal is, in addition to delivering quicker, Parekh added. It will seemingly pilot the expertise in the U.S. and UK earlier than utilizing it globally.

“Speed is one aspect of it, but more importantly for us, it will be the flexibility, it will be the ability to track… and more importantly, through all of this, help drive a better customer experience,” he mentioned.

Locus’ shareholders included Singapore’s sovereign wealth fund GIC and personal fairness corporations Alpha Wave, Tiger Global, and Qualcomm Ventures previous to the all-share acquisition by Ingka Investments, the retailer’s funding arm.

Under the deal, Locus will function independently and proceed to work with purchasers past IKEA.

Known principally for its vivid blue big-box suburban shops showcasing sofas, beds and bookcases in a labyrinth format, IKEA has shifted focus onto its online enterprise over the previous 5 years and invested in smaller city-centre shops because it targets youthful and extra city consumers.

Online gross sales accounted for 28% of complete IKEA retail gross sales in its 2024 monetary 12 months, up from 11% in 2019.

The acquisition comes only a week after Ingka Investments purchased a constructing in Manhattan for $213 million, pushing forward with U.S. growth regardless of President Donald Trump imposing larger tariffs on furnishings imports.

“In terms of the macroeconomics around us … probably there’s uncertainty on the quarters ahead,” Parekh mentioned. “But as a company we remain committed to the U.S.”