Ikea Acquires WMS Citing ‘Unprecedented Demand’ for Warehousing Tech
Ikea is making moves to bring warehouse management technology in-house to strengthen its fulfillment operations.
Ingka Investments, the investment arm of Ikea parent Ingka Group, is acquiring cloud-based warehouse management system (WMS) and end-to-end supply chain execution software Made4net for an undisclosed sum. In a press release, the Swedish company attributed the acquisition to retail’s “unprecedented demand” for warehouse and fulfillment solutions.
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The Made4net solution will be deployed across Ikea stores and fulfillment points to modernize and future proof omnichannel operations in what’s likely “the largest implementation of a WMS in the world,” the company said.
“We are constantly looking to improve our business to better meet the needs of our customers,” said Wim Blaauw, chief digital officer for Ingka Group, in a statement. “As part of that, we are implementing a variety of digital solutions that will secure the speed and agility required to support the new omnichannel reality we operate in.”
Ingka’s Made4net acquisition appears to be part of Ikea’s efforts to streamline its supply chain and give consumers more options. In April, the company announced plans to invest nearly $2.2 billion in its U.S. omnichannel growth strategy. That funding will help enhance its fulfillment network and contribute to eight new store openings, nine delivery-only “plan and order” stations and 900 pickup locations.
These investments, analysts pointed out at the time, positioned the company to directly compete with digital natives in the U.S. home furnishings space including Wayfair and Overstock, among others.
Retailers looking to scale their operations with technology often have to decide if they want to build their own software or acquire a third-party business. Ikea’s acquisition mimics companies like American Eagle Outfitters, which acquired Quiet Logistics and AirTerra to build and scale the Quiet Platforms nationwide fulfillment network. This came a few years after Target launched a last-mile delivery network when it acquired same-day delivery provider Shipt in 2017.
With Ingka’s backing, Made4net will be able to further invest in product innovation and customer support resources to enhance its global market position. Made4net will continue to operate as an independent subsidiary from its Teaneck, N.J. headquarters and six global offices. Last year, the company acquired fellow WMS platform provider Zethcon to grow its market share in the third-party logistics (3PL) sector.
Ikea will leverage the platform’s SCExpert suite of warehouse, transportation, labor and yard management solutions to power its worldwide fulfillment centers and store operations across 482 locations in more than 31 countries. The retailer estimates that 100,000 company users will have access to the platform to deliver faster and more accurate order fulfillment and improved supply chain visibility.
“Our business currently requires a better fulfillment operations system with more accurate data that better supports handling for our customers,” said Tolga Öncu, head of retail, Ingka Group, in a statement. “Our goal is to become leaders of life at home, serving more people in an omnichannel reality, whenever and however customers choose to meet us.”
Made4net CEO Duff Davidson will stay in this role along with the rest of the company’s leadership team.
“The Made4net platform has had a long customer track record for fast implementation and the ability to pivot quickly with changing business and market dynamics,” said Davidson in a statement. “We’re excited to expand those capabilities for all of our customers through the increased backing of Ingka and also look forward to transforming the future of unified commerce by helping Ikea’s global retail network deliver on its omnichannel fulfillment vision.”
Ingka Investments acquired Made4net from private equity owner Thompson Street Capital Partners, which made an initial growth investment in the company in January 2021.
“We are extremely proud of what we have accomplished with the entire Made4net team over the past couple years, meaningfully extending the company’s global market position through both organic and inorganic investments,” said Tom St. Geme, director at Thompson Street Capital Partners. “Made4net has found a fantastic new home with Ingka, and the new Ikea relationship represents a transformational milestone for the company, reinforcing Made4net’s commitment to building world-class supply chain software solutions for customers large and small across the globe.”
