Darkstore opens on-demand delivery fulfillment centers in New York and Phoenix

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Darkstore is expanding its warehouse-as-a-service product into New York and Phoenix, following the launch of its San Francisco Darkstore in May. The decision to launch in additional markets is driven by the demand from Darkstore’s brand customers,” Darkstore CEO Lee Hnetinka told me via email. Tuft & Needle, Darkstore’s first customer, is based in Phoenix and is one of the mattress brand’s most popular markets.

“The amount of volume that they are able to drive in Phoenix just from them alone made more than enough sense for us to launch there,” Hnetinka said. “For New York City this decision was driven by the demand from many brands that wanted it. As one of the commerce capitals of the world it’s no surprise every brand wants to offer an amazing customer experience there and this is what Darkstore enables for them.”

Darkstore is also announcing a $120,000 strategic investment from R/GA Ventures, as part of its participation in the R/GA + Westfield Labs Connected Commerce Accelerator.

“Darkstore offers a unique and innovative solution for both e-commerce and physical retail, so R/GA is excited to partner with Lee and his team,” R/GA EVP Global Chief Operating Officer and manager of the R/GA Accelerator Stephen Plumlee told TechCrunch. “We see numerous opportunities for brands and retailers not only to optimize the fulfillment process but also to build relationships with consumers. R/GA looks forward to working with Darkstore in coming months and years.

Darkstore targets direct-to-consumer e-commerce brands that don’t have local brick-and-mortar stores, but that want to ship their products quickly. In addition to Tuft & Needle, Darkstore’s customers include clothing brand Frank+Oak, ski and snowboard delivery service SkiPods, cell phone case company Peel and tomboy clothing brand Wildfang.

“Wildfang customers are opting for expedited shipping in increasing numbers,” Wildfang CEO Emma Mcilroy told TechCrunch. “We’ve seen significant uplift in 2 day and overnight shipping and we’d like to see if we can go one better. We pride ourselves on always putting the consumer first and we’d love to see if we can get her what she needs – the same day! We believe this will be a huge competitive advantage in the Holiday season and will ensure our girl never misses a special occasion.”

Darkstore doesn’t charge brands anything to store inventory, but charges 3% per item that leaves Darkstore, with a minimum of $2 and a maximum of $20. Since launching, Darkstore has moved nearly $800,000 worth of merchandise through its platform and has a projected annual recurring revenue of $705,000, which represents 120% month-over-month revenue growth. Darkstore is aiming to be in seven locations by the end of next year.