Flexport raises $1 billion in funding led by SoftBank to accelerate disruption of the $2 trillion freight forwarding market
Just a day after investing $200 million in physical storage startup Clutter, SoftBank Vision Fund, a venture arm of SoftBank, has led a $1 billion investment in logistics startup Flexport to disrupt the $2 trillion freight forwarding market. The fresh funding now puts Flexport, which operates its own 747 aircraft and employs 1,066 people across 11 offices and four warehouses, at $3.2 billion valuation. Other backers in the funding include existing investors Founders Fund, DST Global, Cherubic Ventures, Susa Ventures and SF Express.
According to a public release, Flexport will use the capital to deepen its technology and data capabilities, grow its global logistics infrastructure footprint, and invest in industry expertise to help clients navigate increasingly complex global trade environments. The company expects the financing to close in the second quarter upon the receipt of regulatory approvals and other customary closing conditions.
Founded in 2013 by Ryan Petersen, Flexport is a full-service global freight forwarder and logistics platform using modern software to fix the user experience in global trade. Flexport uniquely delivers a combination of advanced technology, physical logistics infrastructure and human expertise, providing fast and predictable transit times, visibility and control, and lower supply chain costs to logistics and supply chain professionals across the globe. First to market with a purpose-built cloud software and data analytics platform, Flexport today connects almost 10,000 clients and suppliers across more than 200 countries, including established global brands like Georgia-Pacific as well as emerging innovators like Sonos. Flexport offers a full range of services, including ocean, air, truck and rail freight, drayage and cartage, warehousing, customs and trade advisory, financing, and insurance.
Modern companies must be able to deliver products almost instantly and be highly responsive to the expectations of empowered consumers — expectations that are table stakes in the consumer world but that the antiquated global freight forwarding ecosystem is often unable to meet.
“Our vision is to unite the planet in a seamless web of commerce, unhindered by physical borders, boundaries or political agendas,” said Ryan Petersen, founder and CEO of Flexport. “The Vision Fund shares our belief in using technology to create a better, more interconnected world and their support will propel us into that future, making global trade easier for everyone.”
The investment acknowledges the strong progress Flexport has made in disrupting the $2 trillion freight forwarding market, as well as the confidence investors have in the company’s potential to transform the even larger global logistics industry.
“Logistics is a $7 trillion industry that is crucial for global trade, yet extraordinarily fragmented. Even the largest companies only hold single-digit market share,” said Michael Ronen, managing partner at SoftBank Investment Advisers (SBIA). “Flexport’s pioneering use of technology and its data advantage position the company for exceptional growth in this multi-trillion dollar industry.” Ronen will represent SBIA on the Flexport board, and Ed Shrager, director at SoftBank Investment Advisers, will join as a board observer.
In 2018, Flexport doubled top-line revenue, generated nearly $500M in sales, increased headcount to nearly 1,000 employees, expanded its geographic presence to 11 offices and warehouses around the world, and in September achieved the ranking of 11th largest freight forwarder by ocean volume on the world’s largest shipping lane, the Transpacific Eastbound. The company’s growth directly benefits its customers through geographic network density, greater purchasing scale, and improved data-driven decision making and routing optimization. Today, Flexport connects almost 10,000 clients and suppliers across more than 200 countries.