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Logistics startup Stord raises $90M in Kleiner Perkins-led round, becomes a unicorn and acquires another company – TechCrunch
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When Kleiner Perkins led Stord's $12.4 million Series A in 2019, its founders were in their early 20s and so passionate about their startup that they each dropped out of their respective schools to focus on growing the business.
Fast-forward two years and Stord — an Atlanta-based company that has developed a cloud supply chain — is raising more capital in a round again led by Kleiner Perkins.
This time, Stord has raised $90 million in a Series D round of funding at a post-money valuation of $1.125 billion — more than double the $510 million that the company was valued at when raising $65 million in a Series C financing just six months ago.
In fact, today's funding marks Stord's third since early December of 2020, when it raised its Series B led by Peter Thiel's Founders Fund, and brings the company's total raised since its 2015 inception to $205 million.
Besides Kleiner Perkins, Lux Capital, D1 Capital, Palm Tree Crew, BOND, Dynamo Ventures, Founders Fund, Lineage Logistics and Susa Ventures also participated in the Series D financing. In addition, Michael Rubin, Fanatics founder and founder of GSI Commerce; Carlos Cashman, CEO of Thrasio; Max Mullen, co-founder of Instacart; and Will Gaybrick, CPO at Stripe, put money in the round.
Founders Sean Henry, 24, and Jacob Boudreau, 23, met while Henry was at Georgia Tech and Boudreau was in online classes at Arizona State (ASU) but running his own business, a software development firm, in Atlanta.
Over time, Stord has evolved into a cloud supply chain that can give companies a way to compete and grow with logistics, and provides an integrated platform "that's available exactly when and where they need it," Henry said. Stord combines physical logistics services such as freight, warehousing and fulfillment in that platform, which aims to provide "complete visibility, rapid optimization and elastic scale" for its users.
About two months ago, Stord announced the opening of its first fulfillment center, a 386,000-square-foot facility, in Atlanta, which features warehouse robotics and automation technologies. "It was the first time we were in a building ourselves running it end to end," Henry said.
And today, the company is announcing it has acquired Connecticut-based Fulfillment Works, a 22-year-old company with direct-to-consumer (DTC) experience and warehouses in Nevada and in its home state.
With FulfillmentWorks, the company says it has increased its first-party warehouses, coupled with its network of over 400 warehouse partners and 15,000 carriers.
While Stord would not disclose the amount it paid for Fulfillment Works, Henry did share some of Stord's impressive financial metrics. The company, he said, in 2020 delivered its third consecutive year of 300+% growth, and is on track to do so again in 2021. Stord also achieved more than $100 million in revenue in the first two quarters of 2021, according to Henry, and grew its headcount from 160 people last year to over 450 so far in 2021 (including about 150 Fulfillment Works employees). And since the fourth quarter is often when people do the most online shopping, Henry expects the three-month period to be Stord's heaviest revenue quarter.
For some context, Stord's new sales were up "7x" in the second quarter of 2020 compared to the same period last year. So far in the third quarter, sales are up almost 10x, according to Henry.
Put simply, Stord aims to give brands a way to compete with the likes of Amazon, which has set expectations of fast fulfillment and delivery. The company guarantees two-day shipping to anywhere in the country.
"The supply chain is the new competitive battleground," Henry said. "Today's buying expectations set by Amazon and the rise of the omni-channel shopper have placed immense pressure on companies to maintain more nimble and efficient supply chains… We want every company to have world-class, Prime-like supply chains."
What makes Stord unique, according to Henry, is the fact that it has built what it believes to be the only end-to-end logistics network that combines the physical infrastructure with software.
That too is one of the reasons that Kleiner Perkins doubled down on its investment in the company.
Ilya Fushman, Stord board director and partner at Kleiner Perkins, said even at the time of his firm's investment in 2019, that Henry displayed "amazing maturity and vision."
At a high level, the firm was also just drawn to what he described as the "incredibly large market opportunity."
"It's trillions of dollars of products moving around with consumer expectation that these products will get to them the same day or next day, wherever they are," Fushman told TechCrunch. "And while companies like Amazon have built amazing infrastructure to do that themselves, the rest of the world hasn't really caught up… So there's just amazing opportunity to build software and services to modernize this multitrillion-dollar market."
In other words, Fushman explained, Stord is serving as a "plug and play" or "one stop shop" for retailers and merchants so they don't have to spend resources on their own warehouses or building their own logistics platforms.
Stord launched the software part of its business in January 2020, and it grew 900% during the year, and is today one of the fastest-growing parts of its business.
"We built software to run our logistics and network of hundreds of warehouses," Henry told TechCrunch. "But if companies want to use the same system for existing logistics, they can buy our software to get that kind of visibility."
TechCrunch is an American online newspaper focusing on high tech and startup companies. Reporting on the business of technology, startups, venture capital funding, and Silicon Valley.
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