ByErica E. Phillips
SoftBank Group Corp.’s Vision Fund is diving into the global freight business, leading a new $1 billion round of funding in Flexport Inc., a six-year-old international shipping broker built by Silicon Valley technology developers.
Based in San Francisco, Flexport arranges ocean- and airfreight shipments for retailers and manufacturers—a $2 trillion global business known as freight forwarding—by using technology and a web interface that mirrors travel-booking websites such as Expedia Group Inc. and Priceline Group Inc.
The new capital will back the company’s plans to further build its technology by hiring hundreds of additional engineers, and augment its global logistics network by adding physical distribution operations in major cities, Flexport Chief Executive Ryan Petersen said Thursday.
Apart from SoftBank, the round included funding from existing investors Founders Fund, DST Global, Cherubic Ventures, Susa Ventures and SF Express. Michael Ronen, managing partner at SoftBank Investment Advisers, will join Flexport’s board.
The latest round of funding, the company’s Series D, brings the total amount raised by Flexport to $1.35 billion. Flexport is now valued at $3.2 billion, according to people familiar with the company.
“We felt the environment was right to raise this money on terms we thought were good,” Mr. Petersen said. “And it’s enough money to let us go and build the big vision—and build it faster than we would if we raised less money or scaled organically,” he said.
Flexport is one of a handful of technology startups that have emerged in recent years trying to use software to scrub inefficiencies from the logistics industry.
Since its launch, Flexport has worked mainly with direct-to-consumer e-commerce brands—including Sonos Inc., Allbirds Inc. and MeUndies Inc.—to help them scale without having to build much infrastructure, Mr. Petersen said. Now he said Flexport wants to go after larger customers, helping them compete with behemoth e-commerce operations like those at Amazon.com Inc. by moving goods quickly and running distribution operations in as many locations as possible.
“That might mean a lot more smaller shipments rather than one big shipment to one distribution center,” he said.
The startup works with nearly 10,000 customers in 200 countries. Last year, Flexport’s sales reached nearly $500 million and it grew its staff to almost 1,000 across 11 offices and warehouses.
Flexport is focusing its efforts on building scale on the eastbound trans-Pacific trade lane, carrying goods for customers from Asia to North America. Top global freight forwarders include Deutsche Post AG’s DHL Supply Chain, Kuehne + Nagel International AG, Expeditors International of Washington Inc., DSV A/S and Panalpina World Transport (Holding) Ltd.
Flexport marks SoftBank’s first venture into international freight, but the fund has invested billions in other logistics and delivery startups, including car-hailing giant Uber Technologies Inc., which operates truck brokerage Uber Freight, and restaurant-delivery app DoorDash Inc. SoftBank also invested last year in Chinese trucking brokerage Manbang, known as Full Truck Alliance Group.