Deliv is working with retail partners to transition its delivery services to other providers during the wind down. The company fulfills same-day prescription deliveries for Walgreens and has partnered with retailers like Macy's and Best Buy.
Menlo Park-based Deliv has raised around $85 million in total financing and was last valued at $190 million in 2018, according to PitchBook data. It has been backed by investors including UPS, Google and Macerich.
Target paid $550 million to acquire delivery startup Shipt in 2017. The delivery service has reportedly hired around 70,000 new shoppers since the coronavirus outbreak began. The Deliv purchase could bolster Target's same-day shipping, which it currently offers through Shipt.
Target is interested in a feature of Deliv's technology that allows multiple orders to be pooled and sent to a similar location, according to NBC News. The retailer thought about buying the startup, but abandoned that option because Deliv remained unprofitable even after the pandemic increased demand, the report said.
Last month, Target said its digital sales had grown 100% in the quarter to date, driving overall comparable sales growth of more than 7%. The company is expected to claim around 1.2% of US retail ecommerce sales this year, according to a forecast by research company eMarketer.
The crisis has also spurred growth among ecommerce rivals.
Walmart debuted a 2-hour express delivery service last week. The big box retailer's grocery app surpassed Amazon to become the most downloaded shopping app last month, according to mobile analytics provider App Annie.
The growing demand for delivery has forced hard conversations around company profits and worker safety. Retail and delivery workers recently protested companies including Amazon, Walmart, Target and Instacart for failing to institute adequate protections amid the outbreak.
Even as stay-at-home orders have turned delivery services into a necessity for many, not all delivery companies have benefited.
London-based food delivery startup Deliveroo warned regulators that it may not survive the crisis if a planned investment from Amazon was not allowed. The investment was conditionally approved by British regulators in April.