Airhouse, a startup in the e-commerce infrastructure market, announced this morning that it closed an $11 million Series A round of funding.
The startup’s model places it between brands creating and selling goods that they want to ship to customers and various third-party logistics groups, or 3PLs.
There are myriad 3PLs in the market, Airhouse co-founder and CEO Kevin Gibbon told TechCrunch, making it hard for smaller brands to know whom to work with, and their onboarding cycles can stretch into the months. Airhouse wants to make it easier for e-commerce companies to get up and running without having to deal with 3PLs themselves.
To accomplish that, the startup built relationships with a number of 3PLs, linking its customers to those warehousing and shipping groups via its software. This provides a number of benefits for both sides of the equation. First, by aggregating its customers, Airhouse can pass along economies of scale to its customers that they would not be able to unlock if they worked with 3PLs on their own. Second, the model helps 3PLs themselves access volume that they might not have otherwise been able to reach.
It wasn’t easy to get to where the company is today, it appears. After helping found and scale and shutter Shyp, a startup that TechCrunch covered that worked in the shipping space, Gibbon said that he learned that it’s better to walk — and then run.
After Shyp, he said that he had offers to raise lots of capital. Instead, Airhouse raised modest amounts and went to ground to build. To that end, Airhouse bought a small DTC brand that it used to trial various 3PLs, adding SKUs for customers as it grew, only later becoming a platform for other brands to leverage pre-selected 3PLs. By being a smaller-volume DTC, the company was able to vet 3PLs across a number of metrics, finding the best partners for its later platform business.
The model allows Airhouse customers to leverage multiple 3PLs via a single dashboard, and the startup can help its users recommend locations for storage and rapid shipping based on its broader view of the logistics market. To make all that possible, Airhouse connects its software with warehouse management systems, or WMSs, of its 3PL partners.
Airhouse is growing, saying in a release that since it launched publicly, customers have expanded by 600% and its “partner network footprint” rose by 500%. Those are very Series A-style metrics in that they detail operational results upstream from revenue. We’ll expect more rigorous data if the company raises again.
The e-commerce market has been hot startup territory in recent months, with Shippo also raising in 2021 and expanding its reach this year. The larger e-commerce market may be slowing somewhat from its prior levels of growth, but few expect that consumers are going to suddenly revert to pre-pandemic shopping patterns. This makes it somewhat unsurprising to see Airhouse and others busy adding funds to their accounts.
Now we wait to see how fast Airhouse can scale both 3PLs and customers — and how lucrative the revenue it collects in between proves to be.