Another massive funding round gives Veho room to deliver – TechCrunch

Startups

Two months after shooting a $125 million monster Series A that propelled the company into unicorn territory, parcel delivery company Veho is back with another big round — this time $170 million in Series B.

This time, Tiger Global led, in which SoftBank Vision Fund 2 participated. This latest round gives the company $300 million in total funding raised over the past two years and a valuation of $1.5 billion.

Existing investors, including General Catalyst, Bling Capital, Construct Capital, Industry Ventures and Origin Ventures, participated in the round. Other notable investors in the company include The Chainsmokers’ Mantis VC Fund and the founders and CEOs of Allbirds, Everlane, FIGS, Harry’s, Flexport and Warby Parker.

Two months isn’t that long ago, but let’s keep you up to date with Veho. The logistics technology company is going after the last leg of delivery — how packages get from fulfillment centers to the customer’s doorstep. The global last-mile delivery market is already valued at over $100 billion and will grow to $146.96 billion by 2025.

Veho is not alone in trying to solve this problem. Last year, for example, we saw companies such as Zoomo, Cargamos, Coco, Deliverr and Bringg announce new rounds. However, Veho stands out from the crowd by offering transparency in deliveries that starts with the option of when, where and how customers want their packages delivered, even with a door-to-door returns program so people can easily return items they don’t want. and then real-time communication throughout the process.

Given that the company has been able to secure clients such as HelloFresh, Misfits Market, and thredUP, and that amount of funding in quick succession, there’s no doubt that that approach works.

“While e-commerce sales continue to soar, last mile delivery capability has not kept pace, nor have logistics companies made the technology investments needed to support the level of customer service expected by a new generation of consumers,” says Lydia Jett. , managing partner at SoftBank Investment Advisers, in a written statement. “We believe that Veho has built a leadership position in this market with an integrated technology platform that enables flexible and reliable delivery services, leading to conversion and customer loyalty. We are excited to partner with Itamar Zur and the team to support their mission to reinvent delivery.”

Zur, co-founder and CEO of Veho, told TechCrunch that the Series A round has put the company on the radar of some ecommerce companies, with some they are in talks with. And after a holiday season with people not getting their purchases on time, the company realized it was capable of stepping into a rapidly changing industry. Given the headwinds, Zur took the opportunity to partner with leading venture capital firms, such as Tiger and SoftBank, even though it had taken the Series A just six weeks earlier.

In January, the company grew 40% in sales and another 20% in its customer base. Taking the additional capital allows the company to invest in business units earlier than originally planned. These include major investments in technology and infrastructure, including warehouse automation.

The company also plans to go from 500 employees today to 2,000 by the end of the year by taking on all positions, especially software engineers, as Veho coordinates a huge engineering game. In addition to hiring, the additional capital will enable the company to provide better benefits to its employees and pursue potential strategic acquisitions.

Veho has just started operations in Orlando, its 15th location, and Zur plans to open eight additional locations by the end of the first quarter.

“The new round has accelerated all those things,” he added. “And even though we are growing fast, we still have metrics of 99.9% on-time delivery. For e-commerce businesses, the cost of production or a slick website used to be the differentiator, but now logistics is at the forefront of innovation and is the new differentiator. ”

Veho receiving another major round of funding came as no surprise to the heads of F-Prime Capital, Benjamin Gorman and John Lin, who have invested in similar companies, including Logixboard.

Their company isn’t an investor in Veho, but Gorman said the logistics ecosystem is so big — $700 billion he estimates just for the truck market in the US — that it doesn’t take much market share for a company to have a significant business. . He cites Flexport’s recent $935 million Series E round as an example.

Many logistics companies are grouped together in the fintech universe, where Lin said his company’s research showed that the median valuation has increased twice in one year as the average round size increased from $50 million to $80 million.

In the long run, Gorman believes the industry’s acceleration between 2019 and 2020, driven in part by the global pandemic that is shifting online purchases, is unlikely to be replicated, but neither will it return to the old way of doing things, either. not.

“There are long-term trends driving logistics, including adoption of technology that has been around for a while,” Gorman added. “E-commerce is growing and the drivers for it will continue to be new brands and a shift towards vertical market penetration. There will also be new approaches to consumer messaging. Just like in the food and clothing space, how something is made and flows through the supply chain and logistics in an environmentally friendly way will be part of the brand message.”

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