Flexport secures $260 million in funding from Shopify following a 20% job cut
Flexport, the struggling logistics startup that faced challenges and had to implement job cuts last year to reduce costs, has received a significant financial boost. Flexport announced it has secured $260 million in funding through uncapped convertible notes from the e-commerce platform Shopify.
Flexport founder and CEO Ryan Petersen shared the news on X (formerly Twitter), stating that the investment would enhance the company’s financial position. He added that the investment would send a strong message to customers, highlighting Flexport’s commitment to building a sustainable business focused on delivering top-notch technology and services for global enterprises.
“Further strengthening our cash position with this investment should send a strong message to customers that Flexport is building a long-term sustainable business that will continue to deliver best-in-class technology and services for global businesses,” Petersen said.
Further strengthening our cash position with this investment should send a strong message to customers that Flexport is building a long-term sustainable business that will continue to deliver best-in-class technology and services for global businesses.
— Ryan Petersen (@typesfast) January 20, 2024
Petersen also underscored the importance of the company’s robust balance sheet as a strategic asset in navigating the uncertainties of global trade in the 21st century. He mentioned substantial progress towards achieving profitability, emphasizing the company’s dedication to its long-term vision.
“Our fortress balance sheet continues to be one of our most strategic assets as we navigate the uncertain waters of global trade in the 21st century in pursuit of this vision,” Petersen said, adding that the company had “made massive progress” toward returning to profitability.
This funding announcement follows Flexport’s previous workforce reduction of approximately 20% in October, part of a series of cost-cutting measures aimed at returning to profitability. Petersen noted the company’s earlier achievement of having $1 billion in net cash. It marked the second round of job cuts in 2023, following a workforce reduction in January due to overstaffing.
It’s worth noting that Shopify already held shares in Flexport, with the logistics startup taking over Shopify Logistics, including Deliverr, a fulfillment company. This strategic move expanded Flexport’s logistics offerings, and Shopify acquired a 13% stake in Flexport. In the previous year, Shopify continued to invest in Flexport as part of a funding round that raised a total of $935 million.
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 enables buyers, sellers, and their logistics partners to ship, store, and trade goods.
In May 2022, Flexport raised $1 billion in funding led by SoftBank to deepen its technology and data capabilities, grow its global logistics infrastructure footprint, and invest in industry expertise to help clients navigate an increasingly complex global trade environment. Back then, the startup operated its own 747 aircraft and employed 1,066 people across 11 offices and four warehouses.
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 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.