- Flexport confirmed it had raised $110 million in Series C funding, bringing its post-money valuation to $910 million, Tech Crunch reports.
- The new cash will provide Flexport the opportunity to expand its services beyond freight booking, into trade financing, with the help of new-backer Wells Fargo Strategic Capital.
- The goal, according to CEO Ryan Petersen, is to create a "seamless web of commerce." The company already uses digital tools for freight brokerage, but now also seeks to help their clients fund their purchases within the same platform. In addition, the cash will be used to buy more warehouses.
Flexport is acting more like an Amazon or Maersk than a startup. Perhaps that is because the company is expanding quickly, and not just in size. The revelation a freight forwarder is looking to supply chain financing should demonstrate the power of digital natives to expand their services in ways older companies are just starting to do.
In CEO Ryan Petersen's conversation with Tech Crunch, the executive boasts of Flexport's data collection capabilities, and how integral those were to be able to quickly learn of a company's creditworthiness. Unlike other freight forwarders relying on manual record keeping and paper manifests, Flexport's system involves detailed data tracking, which also allows the company to calculate and minimize the risk in temporary loans to manufacturers, as well as earn an additional percentage — beyond their freight forwarding fees — upon payback
Yet, we may be crediting the startup too much. After all, trade financing for clients is hardly a new idea.
Earlier this year, Maersk announced its intent to begin offering trade financing options for shippers in Florida, New York, New Jersey, Georgia, South Carolina and Texas, in its determination to become a full-service supply chain provider. A Foxconn subsidiary also took up supply chain financing, teaming with Chinese online lending marketplace Dianrong to launch Chained Finance, which issues loans to small manufacturers through blockchain technology.
Regardless of the motivation, trade financing is clearly an on-demand service logistics providers are tapping into. The question is whether older freight forwarders will follow the startup's lead.