The information: Flexe is the most recent to hitch Seattle’s unicorn membership. The 9-year-old firm simply raised a $119 million Sequence D spherical to push its valuation previous $1 billion. Demand for the corporate’s warehousing expertise continues to develop, with income doubling year-over-year to this point. As some startups lay off staff and minimize bills amid a possible recession, the financial uncertainty is definitely a tailwind for Flexe’s enterprise.
The small print: Flexe acquired its begin by providing on-demand warehousing house for on-line retailers, serving to them flip what was historically a hard and fast expenditure (long-term leases) right into a variable value (pay as you go, for what you want). It provides corporations the power to scale their logistics necessities up or down relying on their provide and demand.
The pandemic and ongoing provide chain chaos drew extra corporations to Flexe’s versatile mannequin. Six of the ten largest U.S. retailers are Flexe prospects. The startup, ranked No. 19 on the Startup 200, has since grown its expertise choices past simply warehouse capability, increasing to supply transportation and achievement for each on-line and bodily retailers.
The enterprise: Corporations with logistics wants come to Flexe, which then syndicates alternatives to its community of warehouse operator companions that bid on offering providers. Either side of {the marketplace} use Flexe’s expertise. “We’re creating worth for patrons. We’re additionally creating worth for the operators,” stated Flexe CEO Karl Siebrecht.
The market: “Issues are altering extra quickly than many corporations might react in the way in which they beforehand constructed their provide chains, which had been both heavy capital funding in fastened property like warehouses or signing multi-year contracts with third-party logistics,” stated Dwight Klappich, a analysis vice chairman with Gartner.
Funding to logistics startups equivalent to Flexe almost doubled year-over-year in 2021.
The competitors: Siebrecht stated there aren’t different corporations centered on the identical set of huge enterprise prospects. He pointed to Deliverr, the logistics startup Shopify acquired for $2.1 billion in Could, however stated it addresses smaller retailers. Amazon additionally just lately launched a brand new “Purchase with Prime” program to let on-line retailers use its achievement community to ship orders. However Siebrecht stated Flexe targets a distinct market and in addition works with bodily retailers.
Klappich famous that corporations will proceed to make use of their very own warehouses, however will nonetheless be potential Flexe prospects. “Flexe can nonetheless work with these kind of organizations, permitting them to supply extra distributed community of amenities they will ship from or overflow capability they could want briefly,” he stated.
Talking of Amazon: The Seattle tech big made headlines earlier this 12 months after it added warehouse house quicker than the corporate finally wanted in response to the challenges of the pandemic, outpacing client gross sales and leading to an additional $2 billion in prices within the first quarter.
In some methods, Amazon’s forecast hiccup is a worth proposition for Flexe.
“There are such a lot of variables in your forecasts which can be unknowable,” Siebrecht stated. “And so I believe that’s an awesome instance of the crux of the difficulty.”
The spherical: Siebrecht stated this was the corporate’s most difficult spherical to lift, on condition that enterprise capitalists are rising extra cautious of the economic system and searching extra carefully at a path to profitability.
“It’s a really difficult macro-environment for elevating capital, however a very large final result for Flexe,” Siebrecht stated. “It’s all as a result of the enterprise is performing so nicely.”
The buyers: Funds and accounts managed by BlackRock invested for the primary time. Earlier buyers Activate Capital, Madrona Ventures, Prologis Ventures, Redpoint Ventures, funds and accounts suggested by T. Rowe Value Associates, Inc. and T. Rowe Value Funding Administration, Inc., and Tiger World additionally invested. Flexe final raised cash in January 2021 when it closed out an $80 million Sequence C spherical.
“Flexe is the one logistics platform offering built-in, versatile, omni-channel logistics packages for enterprises,” stated Raj Atluru, managing associate at Activate Capital. “They now simply scale logistics networks and construct nimble, resilient provide chains for at the moment’s dynamic world.”
What’s subsequent: The economic system could also be boosting Flexe’s enterprise, however the uncertainty continues to be a trigger for concern.
“We’ve by no means operated in a recession. We don’t know what that’s going to do to our enterprise,” stated Siebrecht, a finalist for CEO of the Yr on the Startup Awards.
Profitability can be on the CEO’s thoughts.
“We’ve raised lots of capital, which is nice, however we must be actually good about how we handle that money given the market uncertainty. We’ve to make investments in scalable development — not simply development itself,” he stated.
Siebrecht, former CEO of AdReady, was beforehand president of aQuantive’s Atlas expertise division, after which a Microsoft common supervisor. He co-founded Flexe with Edmond Yue and Francis Duong after they attended a housewarming get together and met an entrepreneur who complained about discovering warehouse house for his barware firm. Yue left the corporate a couple of years in the past; Duong left earlier this 12 months to guide a secretive new Web3 startup.
Whole funding is $265 million to this point. The corporate has 463 staff and is hiring.