Business, Freight News, Logistics

Flexport’s epic plan to build a freight empire with its $110M raise

[ October 10, 2017   //   ]

TechCrunch reports that Flexport has an epic plan to build a freight empire via a $110 million Series C at an $800 millilon pre0money valuation. TechCrunch has confirmed the round, and says it is mostly filled with existing investors, including DST, although the TechCrunch also says Felxport decline to comment for their story.

“We’re actually out here trying to create value, not just give venture capital money away” Flexport CEO Ryan Petersen told TechCrunch.. “It’s counterintuitive. The more the business works, the more cash it needs.”

That’s because Flexport, a freight forward logistics network, doesn’t  ship bits, it ships atoms. Lots of them. If you produce a few metric tons of goods in China and need them in stores across the U.S., it books the trucks, ports, planes, and boats you need to get them there. While the dinosaur freight forwarders still rely on paper manifests, Flexport tracks all the data to optimize every route.

TechCrunch describes Flexport as not sexy on the surface. It’s a multi-trillion dollar market opportunity that’s attracting big-name investors. Flexport already moves 7,000 shipping containers a month for an average of $2,000 each while taking around a 15% cut, earning it roughly $2.1 million per month from ocean freight alone. [Correction: $2.1 million, not $21 million] Adding in air, trucking, customs brokerage, cargo insurance and more, revenue is up 3.7X in the last year. “Unit economics have always worked for us, even when we were tiny. We’ve always insisted on that” says Petersen. He describes the enterprise as having an “Amazon-like” element.