Whitebox, a startup that CEO Marcus Startzel said is working to “power the direct-to-consumer economy,” has raised $5 million in Series A funding.
The company works with both startups and more established brands, giving them the tools they need to run direct-to-consumer e-commerce businesses. Customers include McCormick, Starbucks, KitchenAid, Bare Bones and Super Coffee-maker Kitu.
As Startzel put it, “All our clients need to do is send us their product, and then we take care of everything.” That includes listing the products on different online marketplaces, promoting those listings with ads and actually sending the products to customers once they’ve been purchased.
According to Startzel, while there are other companies building tools around Amazon listings and ads, and still others focused on logistics, Whitebox is unique because “we’re selling stuff and we’re moving stuff.” He argued the company can tap into sales opportunities that its competitors can’t, thanks to a “technology platform that connects to both sides” and allows Whitebox to find the best way to sell a brand’s products, for example in multi-packs and variety packs.
Asked whether this approach — in which Whitebox handles physical fulfillment from its own warehouse space — means that the company will need a lot more funding to grow, Startzel first praised his “world-class warehouse team,” then said, “I’m not actually buying warehouses. I’m leasing space, but within weeks of us setting up operations in a warehouse, it’s profitable. It’s not a drag on our business, it’s a huge accelerant to our business.”
Startzel previously worked as a digital ad executive before joining Whitebox earlier this year. Since then, the company has grown to 42 full-time employees (from less than 30) and opened a second fulfillment center.
The new funding was by TDF Ventures, with participation from Merkle CEO David Williams, Millennial Media co-founder Chris Brandenburg and others.
“Our investment signifies our confidence in the team, growth to date, the company and its market potential,” said TDF Ventures Managing Director James Pastoriza in a statement. “By Q1 of 2019, more brick-and-mortar store closings have been announced in the U.S. than in all of 2018, which clearly demonstrates the opportunity in the fast-growing eCommerce market.”