London e-commerce logistics startup Relay has raised a $35 million (£27.6 million) financing round from Plural VC, the venture capital firm created by Ian Hogarth and Taavet Hinrikus. The funding will be used to expand Relay’s AI and machine learning capabilities to drive down delivery costs and streamline online shopping logistics.
With retailers losing over $18 billion annually due to shopping cart abandonment, primarily driven by high delivery costs, Relay aims to solve this issue by transforming outdated delivery networks. The company has developed a “decentralized delivery model” using hyperlocal nodes, which significantly reduces shipping distances, consolidates deliveries, and lowers operational expenses.
Relay’s AI-based platform streamlines parcel allocations, optimizes route pricing, and determines the shortest travel distances. The company claims that its technology has the potential to reduce delivery distances by as much as 95% compared to traditional logistics systems.
“Logistics isn’t just about transportation – it’s a complex mathematical and psychological challenge,” said Jonathan Jenssen, co-founder and CEO of Relay. “By leveraging AI, we’re building critical logistics infrastructure that not only reduces costs but also improves delivery speed and reliability. We’ve already demonstrated success with some of the UK’s largest e-commerce retailers, and this investment will allow us to scale our network nationally and beyond.”
Relay’s existing clients are THG, My Protein, and Glossybox. The business also offers a workflow management platform for automated e-commerce retailers that increases efficiency in last-mile delivery.
The latest funding round comes after raising £8 million in 2023 and adds to investments by Project A and Prologis Ventures.
“There is a massive opportunity to revolutionize parcel delivery for the digital age,” said Hinrikus, co-founder of Wise and now a partner at Plural VC. “Jonathan and Nicole have spent nearly a decade shaping the future of last-mile logistics. Their AI-optimized, asset-light model is already outpacing industry incumbents in both speed and efficiency. We’re excited to help them build an ambitious, next-generation delivery platform.”
Plural VC, co-founded by Hinrikus with Hogarth and Sten Tamkivi in 2022, invests in founder-led ventures that back high-growth tech startups. The company last year launched a £343 million investment fund to support game-changing ventures.
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