Flexport lands enormous $935 million backing for freight forwarding platform
Nine year old tech startup gains backing from big names Andreessen Horowitz, SoftBank, Shopify, and others.
Freight forwarder and customs broker Flexport International LLC says it will expand its logistics technology platform into new geographies and markets while partnering with new companies in that space, thanks to a whopping venture capital round of $935 million announced today.
The enormous funding round comes as pandemic surges and port slowdowns have put rising pressure on international freight flows, inspiring investors to place bets on logistics technology startups that promise possible solutions. Recent examples in the first five weeks of 2022 alone include $200 million for the freight technology company Loadsmart, $65 million for Vecna Robotics, $78 million for truck cargo payments platform BasicBlock Inc., $335 million for warehouse robotics startup Exotec, and $420 million for logistics visibility platform vendor project44.
The backing for San Francisco’s nine-year old startup Flexport, however, is nearly as much as all those investments put together. The “series E” investment round was led by Andreessen Horowitz and MSD Partners with a strategic investment from Shopify, as well as participation from existing partners DST Global, Founders Fund, SoftBank Vision Fund 1, and other investors including Kevin Kwok.
Following the move, Bob Swan, growth operating partner at Andreessen Horowitz, will join Flexport’s board of directors, and representatives from Shopify and MSD Partners will join as board observers.
The flood of money arrives after Flexport in recent years launched a trade advisory service for operations in tariff mitigation, operational risk, and trade compliance; opened warehouse space in Vietnam to help its clients duck U.S.-China trade barrages; and built an intelligent cargo matching platform for ocean freight consolidation services.
According to Flexport’s new investors, they opened their checkbooks for this deal after seeing the onset of Covid turn the global supply chain norm on its head, producing impacts like huge increases in shipping costs, lead times, and demand for cargo space, all while freight capacity struggles to keep up.
In a blog post about the move, the investment firm Andreessen Horowitz says it sees Flexport’s “next-gen” freight forwarding technology as a cure, thanks to its ability to produce benefits like precise cargo visibility, accurate arrival time estimates, and more fully-filled containers.
Flexport CEO Ryan Petersen echoed those themes in his own statement, saying: “The global pandemic and the pressure it put on global supply chains has made the transportation of goods — something many people took for granted — a daily pain point. This investment signals that the market recognizes the need for a tech-enabled logistics ecosystem that has the visibility and resilience to handle unexpected challenges of any scale.”
