Flexe flexes its logistics muscle with $119M raise

Flexe, the on-demand logistics firm, wants to offer companies a more flexible, less costly supply chain to move their products through.

Why it matters: U.S. businesses racked up about $1.85 trillion in logistics costs in 2021, representing 8% of last year’s $23 trillion GDP, according to the trade group Council of Supply Chain Management Professionals.

• That has only been bolstered by the rapid adoption of e-commerce.

The latest: This month, Flexe raised a $119 million Series D round, placing its valuation at just north of $1 billion.

• Investors include funds and accounts managed by BlackRock, Activate Capital, Prologis Ventures, funds and accounts advised by T. Rowe Price Associates and T. Rowe Price Investment Management, and Tiger Global.

How it works: Flexe's technology platform gives customers access and control over a large network of businesses that provide logistics services, granting increased flexibility around both warehousing and transportation services, CEO Karl Siebrecht tells Axios.

• Flexe partners with hundreds of warehouse operators that lease and operate buildings in the U.S. and Canada, he says.
• Its customers include Fortune 1000 companies.

What they're saying: The pandemic and ensuing supply chain disruptions have made it more complicated and financially burdensome to run an e-commerce business — especially when you’re locked into a warehouse lease for many years.

• “All these shocks to the system or market realities that might have been different from all these companies’ forecasts, those are all reasons to come and say, I need flexibility,” Siebrecht says.

Yes, and: Flexe doesn’t lock its companies into yearslong leases, and it helps them avoid setting up and operating cost-intensive warehouses in many different parts of the country to be close to their customers, Siebrecht says.

• “We can offer this particular logistics program in a highly scalable, very cost efficient and flexible pay-as-you-go way,” he says.

What’s next: Flexe will use the recent injection of capital to continue hiring engineers and product people to build more logistics programs, such as retail store replenishment.

• Companies could transport their fastest-moving inventory closer to regional stores so they can replenish every two days instead of every seven days, Siebrecht says.
• Flexe also plans to add to its sales and marketing teams, he says.
• Siebrecht also sees the company expanding its transportation services (it currently partners with transportation providers) and the “intelligence layer” on its platform through software, data and analytics.

The bottom line: Flexe grew by just under 100% last year, and is on pace to more than double growth year over year, Siebrecht says. “And we see that continuing because we're just getting such rapid adoption of this new solution.”