Ohi, an eCommerce startup, announced that it has closed a $2.75 million Seed funding round led by Flybridge Capital Partners.
Founded last year by CEO Ben Jones, Ohi offers same-day or next-day delivery to smaller brands via micro-warehouses in major cities. Gig workers pick and pack at warehouses, while partners Postmates and DoorDash help carry out last-mile courier services. Ohi charges brands a fixed monthly fee to use the platform, starting at $750 per month, while more expensive tiers provide access to more features, such as matching inventory to warehouse locations and access to more spaces. Ohi also charges $2.50 for a pick-and-pack fee.
Jones told reports that delivery is a higher cost for brands than storage, and that Ohi is aiming to compete with eCommerce giant Amazon by offering lower prices on same-day and next-day delivery through its network of commercial space, pick-and-pack and courier services. Last June, Amazon announced that it was expanding its one-day delivery with Amazon Prime, opening it up to members with no minimum purchase amount, and adding more than 10 million products.
However, there's another benefit to those that use Ohi's platform: The eCommerce startup says its brands are seeing a decrease in cart abandonment when customers see the same-day or next-day delivery option.
“There is a lot of positive momentum behind what we’re doing,” said Jones. “Every brand we talk to knows this is the future.”
Ohi currently offers its service in New York's Manhattan and Brooklyn, and is launching in Los Angeles this week.
“The greatest challenge we face is how to scale quickly without making mistakes,” said Jones. “It’s not quite as simple as a piece of software that has one-to-many distribution. We’re actually holding brands’ inventory, and there’s a physical aspect to this business that makes it more complex. Making sure we can scale that efficiently without making mistakes is going to be one of the biggest challenges.”