“This additional capital will enable us to scale our business as we head into the second half of the year, a crunch-time period for retailers and e-commerce companies that are fine-tuning their warehousing and fulfillment strategies for the holiday selling season,” Flowspace co-founder and CEO Ben Eachus said.
The new round of investment closed on June 1 and was led by Moment Ventures of Palo Alto, Calif. The round also included investment from 1984 Ventures and Y Combinator. Founded in 2017, the company has previously raised $1.2M in seed funding.
“Over the past year, we’ve seen tremendous growth, especially from small- and mid-sized businesses that feel shut-out by on-demand warehouse providers that are singularly focused on large enterprises,” Eachus said. “We have also placed a premium on being immediately useable–not in weeks or months, but in days.”
A recent report from commercial real estate services firm CBRE Group found today’s warehousing needs far outstrip the capabilities of existing facilities. David Egan, CBRE global head of industrial and logistics research, said, “E-commerce has created demand for a new type of warehouse with different dimensions, locations and capabilities than what most of the existing U.S. supply offers. Given that only a small portion of the overall market is truly modernized, there is a strong case for new construction and redevelopment of outdated facilities in many markets.”
Most companies looking for warehouse space are turning to newer facilities with greater capabilities. But the 1 billion square feet of new construction over the past decade only makes up 11 percent of all existing warehouse space.
Flowspace said many businesses use its warehouses to manage overflow inventory, deploy direct-to-consumer shipping or accommodate an influx in inventory due to seasonal demands. A company spokesperson said the cloud-based platform provides customers with easy-to-use inventory software that can be set-up in less than 10 minutes and, in most cases, enable moving inventory into partner warehouses within 24 hours.
The system also provides users with an online dashboard to manage month-to-month rentals with each warehouse partner they use. It’s also flexible in working in tandem with Fulfillment By Amazon and other resources that customers may want to use to tackle their overall logistics needs.
Flowspace notes that it is especially suited for e-commerce companies, Amazon sellers, clothing companies, food and beverage companies and liquidators. It offers a free management system that requires no integration, and additional features like cold storage, pick and pack, and custom services.
Headquartered in Irvine, Calif., Flowspace operates more than 100 warehouses in every major metropolitan area, with principal locations in Los Angeles and Oakland, Calif., and several large-scale facilities in Pennsylvania, as well as major sites in Chicago, and Ontario, Canada. The company expects that number to more than double by the end of 2018.