Royal Mail buys NetDespatch for undisclosed sum

The acquisition enhances Royal Mail’s in-house IT capability, particularly around shipping and tracking parcels, which is very important as eCommerce grows.

Royal Mail chief executive Moya Greene recently told a CBI conference the company's future would rely heavily on investment in innovation.

"We have had to invest in technology to make the transition from 'state of the arc to state of the art' for the long haul," she said.

"While we're not an Amazon or Uber, we are looking at all technological advancements in the parcel, postage and logistics world."

The deal complements Royal Mail’s acquisition of Storefeeder earlier this year, the developer behind Royal Mail Click&Drop which, in addition to stock control and order management capabilities, provides similar labelling services for small online marketplace sellers. It also complements Royal Mail’s recent investment in Market Engine, which builds new marketplaces and enables businesses to manage online shop fronts in major global marketplaces.

NetDespatch works with a wide range of e-commerce partners including other UK parcel companies and overseas postal services. It enables carriers to provide web-based applications and services to more than 130,000 of their business customers, allowing them to use delivery data directly transferred from order management and warehouse systems to automate the production of shipping labels, customs documentation and manifests as well as generate any required data files. The platform can also be used to make tracking available for the client from the point of despatch to final delivery.

Nick Landon, Managing Director of Royal Mail Parcels, said: “NetDespatch will allow customers with complex IT estates to integrate with us quickly and with the minimum of effort.”

NetDespatch will be operated at arms-length, as a standalone external-facing subsidiary, enabling it to continue to securely provide services to all of its existing customers. The financial terms of the transaction are not material in the context of the Royal Mail Group as a whole.

The NetDespatch business will remain under the leadership and management of NetDespatch directors, Matthew Robertson and Matthew Clark, and will continue to operate in accordance with the terms and conditions of the agreements with its customers, and in line with industry best practice.

Matthew Robertson, Commercial Director, NetDespatch commented: “We are incredibly proud of our achievements to date and believe that this acquisition will help us to continue to grow and to better service all of our clients. Our aim is to make what is a relatively complex process simple, delivering improvements and savings to everyone in the supply chain from retailer to carrier to consumer. E-commerce is exploding in the run up to Christmas and we expect to continue to steam ahead in 2016 and beyond.”