Warehousing Technology’s Time to Shine
Prominent companies like SpaceX, Stripe, Canva, and ByteDance have one major thing in common – they’re all unicorns. If you ask your eight-year-old how a company can be considered a legendary creature with a spiral horn, he or she would likely have a creative answer for you. But in the venture capital world, a unicorn is real, not legendary, and applies to those startups with a valuation of over $1 billion.
First coined in 2013, startups that reach a $1 billion valuation were thought to be so rare that finding one would be akin to discovering a mythical unicorn. Fast forward to today and there are now 1,000 plus unicorn companies around the world. That sounds high, but considering how many companies there are in the aggregate, reaching that $1 billion valuation number is indeed quite rare.
The newest member of the unicorn club is Seatlle-based Flexe. The company develops warehousing technology, helping firms in turning a traditionally fixed expenditure into a variable cost. Flexe provides companies the flexibility to adjust their logistics requirements depending on current supply and demand as opposed to a pre-defined calculation.
The pandemic wreaked considerable havoc. Yet, for Flexe, the supply chain chaos has drawn more companies their way. In fact, of the 10 largest US retailers, a whopping 6 are current Flexe customers. The Flexe value proposition is defined by four key pillars – an asset-light approach, open logistics networks, a simplified tech platform, and supply chain solutions.
The first – an asset-light approach – is perhaps the most attractive. Companies use Flexe without the need to invest in fixed-term agreements with warehouses nor engage in large capital expenditures or assume any fixed costs. Logistics networks are then transactionally priced depending again on real-time supply and demand. The Flexe platform unifies warehouse placements, orders, inventory management, fulfillment, and transportation. Last but not least, in a supply chain bottleneck environment, firms that can improve delivery promises, respond to disruptions, and upgrade retail operations are the ultimate winners.
Flexe has raised considerable capital. They’re currently ranked No. 10 on the GeekWire 200. Yet, the firm, as its CEO frequently points out, has never operated in a recession. Despite their initial success, the coming months are uncharted territory with little historical data to point them in a clear direction. Investments in growing the company will need to be smartly focused on scalable growth as opposed to growth for growth’s sake. The current environment is full of unicorns who grew to grow but are now facing a very challenging macro-environment for raising future capital.
All in all, Flexe is a game-changer for retailers. In an uncertain environment, a platform that can drive down fixed costs and demonstrate agility in the storage and delivery of goods is welcome news.