A Seattle-based startup that manages an on-demand warehouse marketplace has raised $43 million in a Series B funding round, according to reports. Flexe has found a niche that will help its efforts to wrest marketplace control away from Amazon and provide customers with an alternative to the logistics giant.
The funding round was led by Activate Capital and Tiger Global Management, with the Seattle VC outfit Redpoint Ventures and others also contributing. Flexe has raised $63.5 million so far.
The company offers software that connects retailers and warehouses with extra space that would otherwise not be used. Flexe’s clients include Staples, Toms, Walmart and P&G. The company also has a network of 1,000 warehouses across the U.S. and Canada, up from 370 three years ago.
“Flexe invented the on-demand warehousing category for businesses facing a crisis of agility while trying to meet rising consumer demands,” Co-Founder and CEO Karl Siebrecht told the news outlet.
The company provides a pay-as-you-go model, which precludes the need for warehouse leases – an incentive for companies trying to avoid those particular fixed costs.
“We needed space in the northeast U.S., the Midwest and on the West Coast,” said Justin Schuhardt, a supply chain executive with Walmart. “So, what ended up happening was Flexe was able to, through their marketplace approach, give us a selection of different providers from coast to coast with different size buildings and different available capacity.”
Flexe does not sell on Amazon, and instead allows businesses to ship their own branded boxes using their own shipping software, while the warehouses handle the labor and administrative tasks. There is also no data sharing with Amazon, which many companies see as a plus.
“Companies that depend on Amazon logistics to meet their customers’ expectations will hand over their customer data, customer experience and customer relationship to Amazon,” Siebrecht said. “We believe there’s a better way – a new option that uses technology to offer an entirely new model for on-demand warehousing and fulfillment.”