Digital-oriented freight forwarder Flexport has raised $260 million from e-commerce provider Shopify after a tumultuous year, giving the supply chain solutions provider a boost of confidence.
Founder and CEO Ryan Petersen announced on Friday night via X, formerly known as Twitter, that Shopify (NYSE: SHOP) provided $260 million “on an uncapped convertible note.” He noted in a series of posts that Flexport’s fortress balance sheet is one of the company’s most strategic assets for the future.
In his post Friday, Petersen thanked Shopify CEO Tobi Lutke, saying, “Thank you @tobi and your entire team for this tremendous vote of confidence in our business and partnership. … This is an important milestone along our journey to build an end-to-end logistics technology platform to make global commerce so easy that there will be more of it.”
The move comes after Flexport acquired Shopify’s logistics arm last year, expanding the company into e-commerce fulfillment and last-mile delivery. As part of the deal, Shopify received a 13% equity stake in Flexport and a seat on the board.
In 2022, Shopify, which enables merchants to build online storefronts and leverage other services, invested an undisclosed amount in Flexport as part of a nearly $1 billion funding raise that valued it at $8 billion. The two companies have worked closely together since then. In February 2023, Flexport created a tool that helps sellers on the Shopify e-commerce platform manage and track inbound ocean shipments.
Additionally in October, Flexport underwent a 20% drop in workforce as it attempted to circumvent financial losses. The move cost about 600 employees in total.
This is a developing story.