Flexport
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Flexport, a 5.5-year-old, San Francisco-based full-service air and ocean freight forwarder, says it has raised $1 billion in fresh funding led by the SoftBank Vision Fund.
Earlier backers of the company, including Founders Fund, DST Global, Cherubic Ventures, Susa Ventures and SF Express, all participated in the round, which reportedly pegs the company’s post-money valuation at $3.2 billion.
According to Forbes, which broke the news, Flexport generated revenue of $471 last year, up from $224.8 million in 2017, thanks in part to some customers who the company says spend more than $10 million a year at Flexport for its help in managing their supply chains.
The company is apparently moving so fast, it hasn’t had a chance to update its marketing materials. CEO Ryan Petersen tells Forbes the company now employs 1,066 people across 11 offices and four warehouses around the world. Its site states it has 600 employees.
Axios reported last week that Flexport was in talks to raise money in a deal led by SoftBank that would value the company in the $3 billion range.
It had previously raised $305 million across five rounds, including, most recently, in April 2018, according to Crunchbase.
Flexport competes with numerous other freight forwarding online marketplaces that are focused on price comparison, as well as helping their clients book and track shipments. But its goal, seemingly, is to compete more directly with heavyweights like DHL, FedEx and UPS. In late 2017, it said it was beginning to charter its own aircraft. Petersen tells Forbes that Flexport now has four warehouses around the world, too.
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Despite its “unsexy” reputation, the logistics industry is attracting massive investment from venture capitalists.
With a fresh $97 million in Series C funding, NEXT joins a fleet of heavily funded logistics platforms, including Flexport, Huochebang and Convoy. The company, which connects shippers and carriers through an online marketplace, raised the capital from Brookfield Ventures, with participation from Sequoia Capital and logistics solutions provider GLP. NEXT declined to disclose the valuation or whether its latest financing included debt.
In 2018, global logistics startups collected more than $6 billion in VC funding, nearly double the $3.2 billion invested in the space the year prior, according to PitchBook. A significant portion of the 2018 capital went to Chinese ventures at about 40 percent. U.S. logistics businesses raised 19 percent, or about $1.2 billion, across 114 deals.
“The logistics space is under more pressure than ever before — with more shipments coming into our ports than drivers and warehouses have the capacity to manage,” NEXT co-founder and chief executive officer Lidia Yan said in a statement.
NEXT was founded in 2015 by Yan and her husband Elton Chung. The round brings the business’s total raised to $125 million, including a $21 million round in January 2018.
Headquartered in Lynwood, California, NEXT plans to use the investment to fill 150 positions in 2019, as well as complete the launch of Relay, a new service targeting the “systemic congestion” at shipping ports.
“NEXT continues to address the critical issues that face logistics management in the U.S. — from the nationwide driver shortage to congestion and operations at our busiest ports,” Sequoia partner Omar Hamoui said in a statement. “We’ve been impressed with NEXT’s ability to execute, and the introduction of Relay proves they have the team and expertise to continue innovating in ways that will ease the pain points of carriers and shippers.”
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When Amazon rolled out its membership-based two-day shipping service in 2005, e-commerce and customer expectations around fulfillment speed changed forever.
Today, more than 100 million people use Amazon Prime. That means, 100 million people are fully accustomed to two-day shipping and if they can’t have it, they shop elsewhere. As The Wall Street Journal’s Christopher Mims recently put it: “Alongside life, liberty and the pursuit of happiness, you can now add another inalienable right: two-day shipping on practically everything.”
Only recently have Amazon’s competitors begun to offer similar fast delivery options. About two years ago, Walmart launched its own free two-day delivery service for its owned-inventory; eBay followed suit, establishing a three-day or less delivery guaranteed option for shoppers in March 2017.
To power these Prime-like delivery options, Walmart, eBay and the Canadian e-commerce business Shopify are relying on a little upstart.
One-year-old Deliverr helps businesses offer rapid delivery experiences to their customers. Today, the company is announcing a $7.1 million Series A led by Joe Lonsdale’s 8VC, with participation from Zola founder Shan-Lyn Ma, Flexport chief executive officer Ryan Peterson and others.
The San Francisco-based startup uses machine learning and predictive intelligence to determine which of its warehouses to store its client’s goods.
Currently, Deliverr operates out of more than 10 warehouses in Texas, Missouri, Pennsylvania, Ohio and New Jersey, among other states, though co-founder Michael Krakaris says that number is growing every week. Its customers typically store inventory in three to five different locations based on Deliverr’s predictive algorithms.
Unlike Amazon, which owns more than 75 fulfillment centers, Deliverr doesn’t own its warehouses. Krakaris describes the company’s strategy as a sort of Uber for fulfillment.
“Uber didn’t change the physical infrastructure of cars. They didn’t build their own taxis. What they did was create software that could connect excess capacity drivers,” Krakaris told TechCrunch. “Most warehouses aren’t going to be full. We are going in and filling that extra space they wouldn’t otherwise fill.”
One of the startup’s tricks is to use brand-neutral packaging so any and all marketplaces could theoretically power fulfillment through Deliverr. Amazon, of course, sticks a Prime sticker on all its outgoing packages. And because Amazon’s fulfillment service is used by some eBay sellers, eBay items are known to show up at customers’ homes in Amazon-branded packaging. Not a great look for eBay.
“You need an independent fulfillment service that can handle all these different fulfillment channels and be neutral,” Krakaris said.
Deliverr plans to use the investment to scale its team and ink partnerships with additional online retailers.
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“We’re actually out here trying to create value, not just give venture capital money away” says Flexport CEO Ryan Petersen. “It’s counterintuitive. The more the business works, the more cash it needs.” That’s because Flexport doesn’t ship bits, it ships atoms. Lots of them. Flexport is a freight forwarding logistics network. If you produce a… Read More
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Rapid changes in the shipping industry has caught the attention of investors who are starting to pour large sums of money into the industry. And likely for good reason: as a future where trucks are run autonomously becomes ever clearer, the sensors and software behind that is going to have to be able to keep up. One company, Samsara, is working on just those kinds of sensors and products to… Read More
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Remember when we found out billionaire investor Peter Thiel is in support of presumptive Republican nominee Donald Trump? At TechCrunch Shanghai 2016, Flexport CEO Ryan Petersen, who has received significant funding from Thiel, candidly spoke about his discomfort around Thiel’s backing of Trump. “I don’t know what’s going on there,” Petersen told me on stage… Read More
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