May
13
2020
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Startups are transforming global trade in the COVID-19 era

Global trade watchers breathed a sigh of relief on January 15, 2020.

After two years of threats, tariffs and tweets, there was finally a truce in the trade war between the U.S. and China. The agreement signed by President Trump and Chinese Vice Premier Liu He in the Oval Office didn’t resolve all trade tensions and maintained most of the $360 billion in tariffs the administration had put on Chinese goods. But for the first time in months, it looked like manufacturers, importers and shippers could start to put two difficult years behind them.

Then came COVID-19, at first a local disruption in Wuhan, China. Then it spread throughout Hubei province, causing havoc in a concentric circle that eventually engulfed the rest of China, where industrial production fell by more than 13.5% in the first two months of the year. When the virus spread everywhere, chaos ensued: Factories shuttered. Borders closed. Supply chains crumbled.

“It has had a cascading effect through the entire world’s economy,” says Anja Manuel, co-founder and managing partner of Rice, Hadley, Gates & Manuel LLC, an international strategic consulting firm based in Silicon Valley.

The crisis has caused a drastic contraction in global trade; the World Trade Organization estimates trade volumes will fall 13-20% in 2020. And spinning activity back up could be tricky: Even as China starts to get back online, the slowdown there could reduce worldwide exports by $50 billion this year. When factories do reopen, there’s no guarantee whether they will have parts available or empty warehouses, says Manuel, who also serves on the advisory board of Flexport, a shipping logistics startup. “Our supply chains are so tightly-knit and so just-in-time that throw a few wrenches in it like we’ve just done, and it’s going to be really hard to stand it back up again. The idea that we go back to normal the moment we lift restrictions is unlikely, fanciful, even.”

Getting to that new normal, though, is a job that a number of logistics startups are embracing. Already on the rise, companies like Flexport, Haven and Factiv see a global trade crisis as a setback, but also an opportunity to demonstrate the value of their digital platforms in a very much analog industry.

May
05
2020
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Orca Security raises $20M Series A for its multi-cloud security platform

Orca Security, an Israeli cloud security firm that focuses on giving enterprises better visibility into their multi-cloud deployments on AWS, Azure and GCP, today announced that it has raised a $20 million Series A round led by GGV Capital. YL Ventures and Silicon Valley CISO Investments also participated in this round. Together with its seed investment led by YL Ventures, this brings Orca’s total funding to $27 million.

One feature that makes Orca stand out is its ability to quickly provide workload-level visibility without the need for an agent or network scanner. Instead, Orca uses low-level APIs that allow it to gain visibility into what exactly is running in your cloud.

The founders of Orca all have a background as architects and CTOs at other companies, including the likes of Check Point Technologies, as well as the Israeli army’s Unit 8200. As Orca CPO and co-founder Gil Geron told me in a meeting in Tel Aviv earlier this year, the founders were looking for a big enough problem to solve and it quickly became clear that at the core of most security breaches were misconfigurations or the lack of security tools in the right places. “What we deduced is that in too many cases, we have the security tools that can protect us, but we don’t have them in the right place at the right time,” Geron, who previously led a security team at Check Point, said. “And this is because there is this friction between the business’ need to grow and the need to have it secure.”

Orca delivers its solution as a SaaS platform and on top of providing work level visibility into these public clouds, it also offers security tools that can scan for vulnerabilities, malware, misconfigurations, password issues, secret keys in personally identifiable information.

“In a software-driven world that is moving faster than ever before, it’s extremely difficult for security teams to properly discover and protect every cloud asset,” said GGV managing partner Glenn Solomon . “Orca Security’s novel approach provides unparalleled visibility into these assets and brings this power back to the CISO without slowing down engineering.”

Orca Security is barely a year and a half old, but it also counts companies like Flexport, Fiverr, Sisene and Qubole among its customers.

Feb
04
2020
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Layoffs hit Flexport, another SoftBank-backed startup worth $3.2B

Fearing weak fundraising options in the wake of the WeWork implosion, late-stage startups are tightening their belts. The latest is another Softbank-funded company, joining Zume Pizza (80 percent of staff laid off), Wag (80 percent),  Fair (40%), Getaround (25 percent), Rappi (6 percent), and Oyo (5 percent) that have all cut staff to slow their burn rate and reduce their funding needs. Now freight forwarding startup Flexport is laying off 3 percent of its global staff.

“We’re restructuring some parts of our organization to move faster and with greater clarity and purpose. With that came the difficult decision to part ways with around 50 employees” a Flexport spokesperson tells TechCrunch after we asked today if it had seen layoffs like its peers.

Flexport CEO Ryan Petersen

Flexport had raised a $1 billion Series D led by SoftBank at a $3.2 billion valuation a year ago, bringing it to $1.3 billion in funding. The company helps move shipping containers full of goods between manufacturers and retailers using digital tools unlike its old-school competitors.

“We underinvested in areas that help us serve clients efficiently, and we over-invested in scaling our existing process when we actually needed to be agile and adaptable to best serve our clients, especially in a year of unprecedented volatility in global trade,” the spokesperson explained.

Flexport still had a record year, working with 10,000 clients to finance and transport goods. The shipping industry is so huge that it’s still only the seventh largest freight forwarder on its top Trans-Pacific Eastbound leg. The massive headroom for growth plus its use of software to coordinate supply chains and optimize routing is what attracted SoftBank.

Flexport Dashboard

The Flexboard Platform dashboard offers maps, notifications, task lists, and chat for Flexport clients and their factory suppliers.

But many late-stage startups are worried about where they’ll get their next round after taking huge sums of cash from SoftBank at tall valuations. As of November, SoftBank had only managed to raise about $2 billion for its Vision Fund 2 despite plans for a total of $108 billion, Bloomberg reported. LPs were partially spooked by SoftBank’s reckless investment in WeWork. Further layoffs at its portfolio companies could further stoke concerns about entrusting it with more cash.

Unless growth-stage startups can cobble together enough institutional investors to build big rounds, or other huge capital sources like sovereign wealth funds materialize for them, these startups might not be able to raise enough to keep rapidly burning. Those that can’t reach profitability or find an exit may face down-rounds that can come with onerous terms, trigger talent exodus death spirals, or just not provide enough money.

Flexport has managed to escape with just 3 percent layoffs for now. Being proactive about cuts to reach sustainability may be smarter than gambling that one’s business or the funding climate with suddenly improve. But while other SoftBank startups had to spend tons to edge out direct competitors or make up for weak on-demand service margins, Flexport at least has a tried and true business where incumbents have been asleep at the wheel.

Sep
25
2019
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Why Flexport built a slick Slack SaaS for shipping

“Make their metrics your metrics” is one of Flexport CEO Ryan Petersen’s mantras. Sometimes that means building free software for your clients. It can be frustrating aligning your fates with a fellow business if they operate on email, phone and fax like much of the freight-forwarding industry that gets pallets of goods across the world from factories to retailer’s floors. So today, the new Flexport Platform launches, allowing brand clients, their factories and their Flexport logistics reps to all team up to get stuff where it belongs on time.

The software could further stoke Flexport‘s growth by locking in customers to work with the shipping startup that was valued at $3.2 billion after raising $1 billion from SoftBank in February (to bring it to $1.3 billion in funding). Flexport’s revenue was up 95%, to $441 million in 2018, Forbes’s Alex Konrad reported. Yet there’s plenty of green field to conquer given even Flexport’s largest competitor Kuehne & Nagel only holds 2.5% market share while the whole freight-forwarding industry grows 4% per year.

Flexport Dashboard

The Flexboard Platform dashboard offers maps, notifications, task lists, and chat for Flexport clients and their factory suppliers.

The Flexport Platform lets 10,000 clients, like Bombas socks, invite their suppliers to collaborate on managing shipments together. An integrated calendar makes shipping timelines clear. A map gives clients a god-view of their freight criss-crossing the globe. Pre-filled forms expedite compliance. Tagging lets users group shipments and filter or search their dashboards, and flag something for extra care — like a pallet of goods critical for a marketing launch event. Collaborators also can sync up via a Facebook Wall-style feature, or direct message the team with threaded conversations, much like Slack.

Ryan Petersen Flexport

Flexport CEO Ryan Petersen

“There’s infinite demand for a job well done,” Petersen says about his industry.The hard part has always been doing a good job.” Taking the confusion out communication scattered across email chains means clients get shipping documentation filled out 50% faster with 4X more accurate data. Flexport is on the tip of the tongue as software eats the world, with antiquated sectors suddenly leveling up.

Petersen saw the inefficiency first-hand growing up running his own import/export and customs business. He is part of a wave of entrepreneurs attacking unsexy businesses that the typical Silicon Valley enterprise exec might never stumble across. But three years after we profiled his scrappy company, when it had raised just $26 million in funding and had 700 clients, Petersen tells me “We’re trying to retire the word ‘startup.’ ”

It turns out top global brands like Sonos and Klean Kanteen don’t like the second half of “move fast and break things” when those things are boats and planes full of their products. “They want a company that will help them grow, not the fly-by-night startup,” Petersen explains. But with competitors trying to chase it and incumbents trying to adopt similar technologies, Flexport must maintain its agility to avoid being subsumed by the pack.

As his company has grown to 1,700 employees, he’s dedicated a ton of his time to keeping its culture in check — especially after a certain other logistics giant startup had some uber-painful troubles with workplace toxicity. “You either have too much bureaucracy or not enough process, and no one knows what to do. The English language lacks a positive word for bureaucracy — just the right amount of process so people can move quickly.”

That’s what Flexport wanted to give clients with the new platform. From a dedicated tasks queue to a notifications pane, it’s built to take the guesswork out of what to do next while being as approachable as consumer software for new users. That also why it’s free. It’s not supposed to be some chore you’re forced to complete, product lead Frank te Pas tells me. “As you move your first shipment you get onboarded onto this system” says te Pas. “It’s our way of helping.”

Flexport Warehouse

That’s meant a ton of personal growth, too. Petersen is still enthusiastic, curious and charmingly rough around the edges, but he carries it all with more dignity and gravity than a few years back. “The only way I get to stay in this role is if I learn faster than anybody else. Being the CEO of a 1,700-person company is not something I knew how to do four to five years ago, or even last year,” he tells me. “I’ve changed and become more self-aware. It’s been really important to take care of myself — sleeping a lot, I quit drinking alcohol, I lost 30 pounds. I feel great.”

With plenty of cash in the bank, industry talent taking it seriously and new businesses like Flexport Capital freight financing and its cargo insurance offered in partnership with Marsh, the company might not be a startup for long. It looks like a hot candidate for a coming season of IPOs. And while this company has its own plane (the leading entry for the naming contest is “Weird Flex But OK”), it’s actually part of its shipping fleet.

Mar
25
2019
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Scalyr launches PowerQueries for advanced log management

Log management service Scalyr today announced the beta launch of PowerQueries, its new tools for letting its users create advanced search operations as they manage their log files and troubleshoot potential issues. The new service allows users to perform complex actions to group, transform, filter and sort their large data sets, as well as to create table lookups and joins. The company promises these queries will happen just as fast as Scalyr’s standard queries and that getting started with these more advanced queries is pretty straightforward.

Scalyr founder and chairman Steve Newman argues that the company’s competitors may offer similar tools, but that “their query languages are too complex, hard-to-learn and hard-to-use.” He also stressed that Scalyr made a conscious decision not to use any machine learning tools to power this and its other services to help admins and developers prioritize issues and instead decided to focus on its query language and making it easier for its users to manage their logs that way.

“So we thought about how we could leverage our strengths — real-time performance, ease-of-use and scalability — to provide similar but better functionality,” he said in today’s announcement. “As a result, we came up with a set of simple but powerful queries that address advanced use cases while improving the user experience dramatically. Like the rest of our solution, our PowerQueries are fast, easy-to-learn and easy-to-use.”

Current Scalyr customers cover a wide range of verticals. They include the likes of NBCUniversal, Barracuda Networks, Spiceworks, John Hopkins University, Giphy, OkCupid and Flexport. Currently, Scalyr has more than 300 paying customers. As Newman stressed, more than 3,500 employees from these customers regularly use the service. He attributes this to the fact that it’s relatively easy to use, thanks to Scalyr’s focus on usability.

The company raised its last funding round — a $20 million Series A round — back in 2017. As Scalyr’s newly minted CEO Christine Heckart told me, though, the company is currently seeing rapid growth and has quickly added headcount in recent months to capitalize on this opportunity. Given this, I wouldn’t be surprised if we saw Scalyr raise another round in the not-so-distant future, especially considering that the log management market itself is also rapidly growing (and has changed quite a bit since Scalyr launched back in 2011), as more companies start their own digital transformation projects, which often allows them to replace some of their legacy IT tools with more modern systems.

Oct
06
2017
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Flexport’s epic plan to build a freight empire with its $110M raise

 “We’re actually out here trying to create value, not just give venture capital money away” says Flexport CEO Ryan Petersen. “It’s counterintuitive. The more the business works, the more cash it needs.” That’s because Flexport doesn’t ship bits, it ships atoms. Lots of them. Flexport is a freight forwarding logistics network. If you produce a… Read More

Jun
21
2017
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Fleet management tracking provider Samsara raises $40M

 Rapid changes in the shipping industry has caught the attention of investors who are starting to pour large sums of money into the industry. And likely for good reason: as a future where trucks are run autonomously becomes ever clearer, the sensors and software behind that is going to have to be able to keep up. One company, Samsara, is working on just those kinds of sensors and products to… Read More

Jun
28
2016
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Flexport CEO expresses some remorse in taking cash from Peter Thiel

megan (2 of 1) Remember when we found out billionaire investor Peter Thiel is in support of presumptive Republican nominee Donald Trump? At TechCrunch Shanghai 2016, Flexport CEO Ryan Peterson, who has received significant funding from Thiel, candidly spoke about his discomfort around Thiel’s backing of Trump. “I don’t know what’s going on there,” Peterson told me on stage… Read More

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