Illustration: Sarah Grillo/Axios

Flexport, a freight logistics "unicorn," has successfully sourced and is buying around $1.4 million of face masks and other medical protective equipment that was requested by San Francisco's Department of Public Health.

Why it matters: Many U.S. hospitals and other health care facilities still do not have what they need to keep their employees safe during the coronavirus pandemic.

San Francisco officials told Flexport what they needed and the company managed to source its first batch of equipment via a supplier network in China (including via SF Express — the FedEx of China, which has been a Flexport investor since 2018).

Among the initial batch of items being delivered today are 60,000 surgical masks, 34,000 gloves, 2,000 surgical gowns and 50 thermometers.

  • The company is unprofitable but chose to pay for the goods anyway. CEO Ryan Petersen also reached out to friends for donations to help cover the cost and received $1 million from Y Combinator co-founder Paul Graham.

From Petersen's email:

"To buy everything on the city's list will cost $1.4 million. Yes, you read that right. We can equip the entire workforce of the city's front-line healthcare workers with all the protective armor they need as they go into battle with COVID for just $1.4 million. If we don't do it, however, I am convinced that nobody will do it. Flexport will get this done, we will get it done fast, and we will donate the goods to the city. I could ask for payment, and I believe they would pay, but I won't be a war profiteer. The city needs to conserve its money for the long fight that lies ahead."

Petersen also tells Axios that his company has stopped providing its services for any container carrying medical protective equipment unless the shipper can prove that it's destined for a health care facility. This comes amidst reports of supply hoarding and price gouging.

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