Warehouse space-sharing startup Warehouse Exchange has raised $2.2 million in seed funding, just four months after bringing on a new CEO to drive its vision of using a digital marketplace to connect buyers and sellers of warehouse space.
In January, the Los Angeles-based firm announced it had named Grant Langston, former leader of the dating app eHarmony, as its new head. Warehouse Exchange has now backed up that hire with new financial backing, which was provided through investments by real estate firms including Xebec Realty, as well as private investors from e-commerce, retail, and distribution companies.
Details of the funding were not disclosed.
The funding comes as the Covid-19 pandemic has accelerated systemic shifts in the supply chain and warehousing industries, Warehouse Exchange said. The company cited a projection by real estate firm Jones Lange LaSalle that 30% of warehouse space leased in the next 10 years will be flexible space.
"There are three main hurdles for small business owners in finding warehouse space today—painful lease requirements, outsized space minimums, and restrictions on access to their inventory. Warehouse Exchange solves these challenges for customers looking to buy space,” Langston said in a release. “We also help warehouse owners quickly monetize their underutilized space, getting premiums over market rate. Our vision is to bring advanced technology to the warehouse industry so we can reinvent the business, similar to what Airbnb created one of the world’s largest marketplaces for unique, authentic places to stay.”
Concurrrent with the funding, Warehouse Exchange has added operator and investor Richard A. Moran as a strategic advisor. His experience includes serving as a Managing Partner at Accenture where he was a leader in the Change Management Practice. He served as the CEO of Accretive Solutions, as a Partner at the Venture Capital firm Venrock, and as President of Menlo College.
The seed round shows continued support by the industry for the idea of using technology to facilitate the sharing of flexible warehouse space. Other players include Marina del Rey, California-based Flowspace, and venture capital-funded, Seattle-based Flexe. Together, they are helping retailers meet increasing market pressures like narrow margins and customers who demand same-day delivery and robust selection.