The e-commerce boom that has put warehouses and delivery companies in a hectic bind this holiday has been a major blessing for companies that have been built to simplify retail fulfillment.
In the wake of a historic Black Friday weekend that capped off an unprecedented November in online sales, on-demand warehousing and fulfillment technology platform Flexe says it closed a $70 million Series C funding round led by new investor T. Rowe Price Associates, Inc.
Founded in 2013, Flexe describes itself as a “warehousing-as-a-service” company that matches retailers with warehouses that have excess capacity. This network essentially enables retailers to buy warehousing space on an on-demand, “pay as you go” basis and turn what was traditionally a fixed cost into a variable cost.
Given that retailers of all sizes have been ramping up their online operations since the start of Covid-19, they have been pressured to quickly scale and adapt their logistics networks as well. But the truth is, many retailers and brands simply can’t afford to invest billions of dollars in fixed warehousing infrastructure or multi-year leases, especially if they were already struggling due to the mid-year store closures.
The round, which takes the company’s total funding to $134 million, also includes existing investments from Activate Capital, Tiger Global, Madrona Ventures, Redpoint Ventures, Prologis Ventures and others.
Since raising a $43 million Series B round in May 2019, Flexe has grown its operator network of warehouses by 50 percent to include more than 1,500 locations across North America.
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As the e-commerce acceleration exposed the need for retailers to expand their logistics networks, Karl Siebrecht, co-founder and CEO of Flexe, told Sourcing Journal that the 1,500-strong warehouse network “helps retailers and brands better prepare for seasonal peaks, manage the next inevitable supply-chain disruption, and support long-term business growth initiatives.”
The Flexe solution is designed to reduce the time a retailer or brand takes to search for third-party logistics providers. Based on the retailer’s project scope, Flexe can refine a list of pre-qualified warehouses in the locations necessary, before assessing and then contacting the qualified matches. The selected warehouse providers then bid on the retailer’s project before a final match is made.
The company offers three major services: e-commerce fulfillment, retail distribution and inventory overflow, all powered on the back end by a cloud-based warehouse management system.
Within the e-commerce fulfillment service, Flexe can take care of the picking, packing and shipping process for all orders, while retailers can create their own curated customer experience and maintain their own brand by shipping their branded boxes and existing shopping software.
For retail distribution, brands can identify the closest Flexe facility to its regional distribution center, upload SKU information to the Flexe platform, schedule the inbound delivery of goods to the Flexe warehouse, monitor real-time inventory levels and schedule retail replenishment shipments as needed.
The Flexe app is designed to give users a single view of inventory and enable them to create multiple orders that are routed to separate providers, so that brands can handle both planned and unplanned overflow events.
Flexe will use the new funding to invest in its team and technology, with the intent to build solutions that help enterprise-class retailers and brands better execute flexible omnichannel operations.
“From day one, we prioritized investing in our proprietary technology and our team so we can solve bigger, harder problems for our customers. This remains our focus today,” Siebrecht told Sourcing Journal. “We’ll use the new capital to continue expanding our team and the capabilities of the Flexe Technology Platform to manage increasingly complex omnichannel and e-commerce fulfillment operations.”
Flexe has recently expanded work with enterprise-class customers such as Walmart and Ace Hardware, and counts Ralph Lauren as a client. The company doesn’t limit its clientele to enterprise retailers, partnering with digital natives as well. Warehouse providers that list their spaces on Flexe include Geodis, Iron Mountain, DM Fulfillment, WDSrx and ITS Logistics.
In July, Flexe inked a key partnership with Google Merchant Center, allowing retailers and brands to connect their Flexe fulfillment programs into Google Shopping ads. This lets shoppers see estimated delivery times—something that Google hasn’t offered. The company says that merchants displaying these delivery times increase conversion rates from ad spend by 9 percent.