Full-service air and ocean freight forwarding startup Flexport is off the block running this week, announcing $1 billion in fresh funding led by SoftBank’s Vision Fund. It should be noted that the 5-yr old, San Francisco CA-based company also had early backing from Cherubic Ventures, DST Global, Founders Fund, SF Express, and Susa Ventures. More importantly, this round of backing seems to have raised Flexport’s valuation, post-money, at roughly $3.2 billion.
Taking a closer look at the numbers over a longer stretch of time, Flexport generated $471 million last year, which is more than double the $224.8 million in 2017. The company says that this massive growth was largely the result of customers spending in excess of $10 million a year to access Flexport’s software-focused supply chain management services.
Taking a closer look at the company, then, CEO Ryan Petersen said it was his decision to pursue backing from Softbank once he realized he needed to more capital to grow. At the time, the startup employed 1,066 people across 11 offices and 4 warehouses; he also had a small fleet of 747 aircraft. But tackling a market “as ancient as mankind” (as he calls it) is not easy on your own.
So he went to SoftBank’s Vision Fund for help. And upon receiving that help, Peterson brought Vision Fund managing partner Michael Ronen onto the Flexport board of directors and Ed Shrager on as a board observer. Peterson will retain majority control of the company but must also appoint another independent board member to sit alongside Trae Stephens (of Founders Fund).
And this round of funding comes only a day after SoftBank’s Vision Fund led another investment round for storage startup Clutter, to the tune of $200 million. It is just the latest investment for the $100 billion firm who continues to write big checks to players they think are big winners in their fields, particularly those who apply new technology to old industries. Their partners include names like Uber (transportation), DoorDash (food delivery), and WeWork (real estate).
At the end of the day, Peterson said, in an interview, “Our business is super scale-driven, and that’s SoftBank’s entire modus operandi [and SoftBank wants] to drive and inject scale into companies, and help them go faster.”
When all is said and done, then, it seems like this could be a match made in heaven.