The tech-focused freight forwarder landed $100 million in funding from Chinese parcel courier SF Express, a move company officials say will accelerate the expansion of its global logistics operations.
Tech-focused freight forwarder Flexport has raised $100 million in new funding from Chinese parcel courier SF Express, according to a statement from the company.
Flexport officials say the investment will accelerate the expansion of the company’s international logistics operations, as well as allow for an even greater focus on developing the software behind those operations.
According to company figures, Flexport has in the past year facilitated the shipment of more than $3.8 billion in goods among 97 countries around the world. Its roster of more than 15,000 customers over the last five years includes a vast array of companies like Warby Parker, Peloton, Ring, Bridgestone and Georgia Pacific.
Amid a rapid expansion that saw it add new offices in Los Angeles, Atlanta and Shenzhen, Flexport tripled its annual revenue in 2017.
Following another new funding round of $110 million in October 2017, Flexport began chartering its own freighter from Hong Kong to Los Angeles and in early 2018 launched the flights as a dedicated twice-weekly service.
The company says it expects to double its warehousing footprint this year and plans to open new offices in Hamburg, Chicago, Taiwan and Shanghai.
Flexport said it plans to use the latest funding from SF Express to build on investments in technology in order to continue to reduce transaction costs, improve the user experience and empower supply chain managers to make more data-driven decisions.
“Our mission is to make global trade easy for everyone,” said Flexport’s CEO and founder Ryan Petersen. “The investment by SF Express, one of the world’s top couriers, will let us create more value for businesses shipping freight internationally.”
“Flexport is one of those companies that will not merely satisfy its market but grow it,” added Paul Graham, founder of early-stage startup incubator Y Combinator and a Flexport investor. “There will be more international trade because of Flexport, and international trade is a very big thing for there to be more of.”
Founded in 2013 on the idea that established freight forwarders were weighed down by antiquated back-end systems and the lengthy paper trail associated with freight movement, Flexport has long been misunderstood by those outside (and even inside) the shipping industry.
Even now, non-logistics focused media publications are referring to Flexport as a “logistics software maker,” which isn’t exactly accurate. Although the company has created its own proprietary platform for its operations, it is not a systems vendor.
Others have compared the company to the now-ubiquitous ride-sharing application Uber, claiming it represented a new breed of logistics provider poised to disrupt the industry by taking advantage of the so-called “on-demand economy.”
In actuality, however, the concept behind Flexport is much simpler than that. Looking at the landscape of existing third-party logistics providers—i.e. those that do not own or operate transportation assets like ships, trucks and planes—founders posited that a new company, one unburdened by antiquated paper-based systems, could take advantage of new technology to work more efficiently and on smaller margins.
Sanne Manders, Flexport’s chief operating officer, said during a panel discussion at the Journal of Commerce’s TPM 2018 conference that his company has spent a good deal of time and effort educating the market as to what it actually does.
“I don’t like the word ‘disruption,’ or the Uber comparison,” he said. “Technology is stuck in the early 1990s, so the question for Flexport was ‘where can we do things that are a little bit better?’ We see it as more of an evolution than disruption.
“There’s a ton of value to be created through increased efficiency and the structuring and interpretation of data,” added Manders. “We hope we can accelerate that.”
Prior investors in Flexport include First Round Capital, Bloomberg Beta, Founders Fund, DST and Y Combinator.
Flexport goes to China
