Flexport, the freight startup that was once deemed “unsexy” by TechCrunch, has recently reached a $800 million valuation. The company’s progressive approach of speeding shipping by utilizing technology has allowed Flexport to become a pioneer in optimization.
Flexport excels in the freighting business because it has utilized digitalization to speed up its shipping process. After raising $65 million last year, it was valued at around $365 million. Only a year later, Flexport was reportedly receiving offers valued above $1 billion but chose to turn them down in favor of a more manageable valuation. Per TechCrunch, it has officially “completed a $110 million Series C at an estimated $800 million pre-money valuation,” with most of it being filled by existing investors, such as DST. From starting off at a smaller startup company just a few years ago, Flexport now has more than 400 employees in seven offices. With its recent funding, it is only rational to assume the company will get even larger in the months to come.
Flexport is aiming to take advantage of its lower relative costs in comparison to other freighting companies by attempting to open its own “cross docks,” warehouses that temporarily store clients’ goods until it can bundle their transport with other shipments heading the same direction or destination. This attempt to become more productive and cost effective will allow the startup to make up for its loss in margins. Although these cross decks are only currently set up in Hong Kong and Los Angeles, CEO Ryan Petersen views the company as a global network. The new round of funding will also help Flexport to pay for the company’s transition from routing logistics to setting up its freight necessities.
Petersen valued the opinion of many of his investors but was selective in who he wanted to be involved with Flexport. With around 57 potential investors being shut down by Petersen, he later expressed his vision of creating a company that is set up for success. With the possibility of a $1 billion valuation presented in front him, Petersen believed he made the right choice in turning it down because of the potential risk of a down round as a result of the current inconsistent market.