Investors Pour More Money Into Warehouse Tech Startups
Flowspace, a technology firm that helps businesses manage warehousing and fulfillment services, received $12 million in funding from an investment group led by Canvas Ventures.
The announcement by Flowspace on April 16 comes on the heels of a similar announcement by Atlanta-based Stord, a company that also is building a digital network for warehouse operators.
Both companies offer cloud-based software that enables shippers to access storage space and track inventory.
Flowspace was started in 2017 and had received $3.4 million in initial funding from Moment Ventures, 1984 Ventures and Y Combinator.
Stord received seed funding of $2.4 million in April 2018 from investors Tom Noonan and Chris Klaus, Dynamo, Rise of the Rest Fund and Engage Ventures. The company has since raised $12.3 million in additional funding from an investment group led by Kleiner Perkins.
Financial backers see the technology offered by Flowspace and Stord as a way to help shippers capitalize on the growth of e-commerce.
“I back companies that are transforming their industries, and I’m thrilled to have made this strategic investment,” Noonan said of his investment in Stord. “Companies are craving a way to get their products into their customers’ hands better, faster, cheaper, easier, more reliably.”
Noonan has been involved in developing several successful enterprise software businesses.
Stord co-founder Sean Henry said the company is focused on developing what he calls a “networked distribution” business model that will enable shippers to better coordinate warehousing and fulfillment activities provided by multiple third-party logistics companies.
“Today, we move over $200 million of product every month [and] while this number is substantial and growing, our journey is just getting started,” Henry said in a blog post April 17 after announcing the latest funding round.
“With this new infusion of capital,” he said, “we’ll aggressively expand our network of warehouses, distribution centers and transportation partners to extend our network coverage and service capabilities.”
Paul Hsiao, a general partner at Canvas Ventures, said he believes that Flowspace, led by CEO Ben Eachus, is “well-positioned to lead” the development of on-demand warehousing and distribution networks.
“I’ve been impressed with the team, their pace of innovation and ability to scale,” he noted.
For his part, Eachus said, “Our vision is to become the fulfillment infrastructure for any company with inventory. We provide a massive warehouse and fulfillment network, real-time visibility into inventory levels and an easy-to-use software.”
Jun-Sheng Li, a former Walmart executive and founder of Transplace Inc. who is working as an executive in residence at Canvas Partners, said the company’s CEO “is embarking on a massive opportunity” to disrupt the entire warehousing business.
“Ben’s experience leading warehousing and fulfillment at high-growth e-commerce companies gives him a unique insight into what customers need to do to be successful,” Li said.
Prior to launching Flowspace, Eachus served for three years as director of strategic projects at The Honest Company Inc. and before that he worked as an IT consultant and held management jobs at McMaster-Carr Supply Co. in Santa Fe Springs, Calif., and Shopzilla Inc. in Santa Monica, Calif.
Canvas Ventures is an early-stage venture capital firm based in Portola Valley, Calif. Another company in its current investment portfolio is Transfix, a New York City firm that is building a digital freight marketplace.