E-commerce infrastructure startup Airhouse announced this morning that it has closed its $11 million Series A funding round.
The capital event was organized by DNX Ventures with the participation of several other investors and business angels. Crunchbase data shows that Airhouse previously raised $5.5 million.
The startup model places it between brands that make and sell the goods they want to ship to customers and various third party logistics groups, or 3PLs.
There are countless 3PLs on the market, co-founder and CEO of Airhouse Kevin Gibbon Vanity told Kippah that this makes it difficult for smaller brands to know who to work with, and their onboarding cycle could take months. Airhouse wants to make it easy for e-commerce companies to get started without having to deal with 3PLs.
To do this, the startup forged relationships with several 3PLs and connected its customers to these storage and delivery groups through its software. This provides many benefits on both sides of the equation. First, by merging its customers, Airhouse can provide its customers with economies of scale that they would not be able to achieve if they operated only with 3PLs. Second, the model allows 3PLs to access volumes themselves that they otherwise would not be able to access.
As it turned out, getting to the place where the company is now located was not easy. While helping gaming-updates spotlight startups and delivery startups to find, scale and close, Gibbon said he realized it was better to walk than to run.
After Shuip, he said that he had proposals to raise large capital. Instead, the air house collected a modest amount and continued to build on the ground. To this end, Airhouse bought a small brand of DTC, which used it to try out various 3PLs, add SKUs for customers, and only later became a platform for other brands to take advantage of preselected 3PLs. The low volume allowed DTC to examine the 3PL across multiple metrics and find the best partner for their post-platform business.
Model Airhouse allows customers to access multiple 3PLs through a single dashboard, and the startup can help its users recommend locations for warehousing and fast delivery based on a broader view of the logistics market. To make all this possible, Airhouse connects its software to the warehouse management system or WMS of its 3PL partners.
Airhouse is growing, with a 600% increase in customer base and a 500% increase in “partner network” since its public launch, it said. These are Series A metrics as they detail operating results before sales. We expect more accurate data as the company regroups.
The e-commerce market has been a hot sector for startups in recent months, and Shippo is also entering 2021 and expanding its footprint this year. The larger e-commerce market may slow slightly from previous levels of growth, but some expect consumers to suddenly return to pre-pandemic shopping patterns. No wonder Airhouse and other companies are adding money to their accounts.
We are now waiting to see how quickly Airhouse can scale for both 3PLs and customers, and how profitable it will generate.