Whitebox, a startup that manages e-commerce logistics and fulfillment for a variety for brands, has raised $18 million in Series B funding.
While discussing the new funding, CEO Marcus Startzel repeated a point he made after Whitebox raised its $5 million Series A last year — that the startup is differentiated by combining tools for managing e-commerce listings across a variety of marketplaces with the ability to store and ship products from its own warehouse spaces across the United States.
“We really saw an opportunity for a platform that could both sell stuff and move stuff,” Startzel said.
However, he suggested that more recently, “The thing that really shined for us through this period has been third layer of that platform, which is our decisioning layer.” That's the layer that allows brands to use data to answer questions like, “Should I fulfill this big wholesale order or hold inventory for the marketplaces? Should I inbound a bunch of stuff into Amazon, or do I keep it here in my Whitebox warehouses to potentially fulfill wholesale orders?”
And of course, this is happening as e-commerce has become increasingly important during the pandemic. Startzel suggested that initially, Whitebox's ideal customer was a “challenger brand” whose business was mostly coming from Shopify, and who needed help as it expanded to Amazon and other marketplaces. But increasingly, the startup is also working with more traditional customers.
“Twenty-five years ago, if you wanted to buy a bottle of ketchup, you had to go to a store and discover a bottle of ketchup as you walked down the condiment aisle,” Startzel said. “Today, the store brands can no longer count on foot traffic, and they're beginning to recognize how important it is on to be on e-commerce.”
As a result, Whitebox said it saw 40% quarter-over-quarter revenue growth in the first three months of 2020, followed by 78% growth in Q2. And its direct-to-consumer shipments grew 300% over the first half of the year.
Startzel also said that the company took “a very aggressive and conservative approach” to managing its fulfillment facilities during this period — aggressive in the sense that it wanted to ensure that there was no disruption in shipments, conservative in its efforts to make sure the facilities were safe.
The Series B was led by Alan Taetle of Noro-Moseley Partners, with participation from TDF Ventures, TCP Venture Capital’s Propel Baltimore Fund, Merkle global chairman David Williams and Millennial Media co-founder Chris Brandenburg.
“Whitebox remains a leader in this extremely busy and competitive space, and is uniquely positioned to see continued growth,” Taetle said in a statement. “The team has built a technology platform that not only expands the tools and insights that brands need to manage their sales and fulfillment processes from top to bottom, but also powers the larger e-commerce economy by eliminating marketplace complexities. Our investment signifies our confidence in Whitebox and the capabilities that we know the company can bring to the table for new and current customers.”
Startzel said the company will use the new funding to expand its sales and marketing teams, continue developing its technology platform and build out its fulfillment centers — it currently has centers in Baltimore (where Whitebox is headquartered), Las Vegas and Memphis, with plans to expand in the Midwest next year.