A Seattle startup is helping warehouse owners make extra money while providing businesses with an easy way to find storage space.
FLEXE is a 2-year-old “sharing economy” company led by former aQuantive and AdReady executive Karl Siebrecht that makes use of excess warehouse space. Its platform includes a network of more than 100 warehouses across 30 markets in North America that offer 650,000 rentable pallet spaces.
Siebrecht, who worked at aQuantive for nine years before it was acquired by Microsoft in 2007, said that too little or too much warehouse capacity is a common problem today. In fact, he founded FLEXE with Edmond Yue and Francis Duong after meeting the CEO of a wholesale wine accessory distributor who had this exact issue.
“Warehousing comes in fixed blocks of capacity with multi-year lease terms, yet many businesses — including his — are highly dynamic due to growth and/or seasonality,” Siebrecht explained. “After he convinced us to start FLEXE, he also became our first customer.”
Businesses that need extra capacity can use FLEXE’s on-demand, pay-as-you go software that matches them to a warehouse based on certain requirements like size and duration. This provides an alternative solution to the fixed costs that often come with a lease, particularly for retailers that only need extra storage space for a limited amount of time.
“Much like Amazon Web Services transformed the fixed costs of building and maintaining data centers into purely variable costs, FLEXE has created a ‘warehousing as a service’ solution that offers the same high-impact advantages,” Siebrecht said.
On the other side, Siebrecht noted that a warehouse operator pays the same monthly lease whether they are operating at 100 percent capacity or 10 percent capacity, so “the additional income they derive through FLEXE by driving higher utilization is very high margin,” he said.
FLEXE, which has raised $2 million and employs 15, manages the transactions between both parties and makes money by taking a small cut.
Siebrecht, previously CEO of Seattle-based advertising startup AdReady, is optimistic about FLEXE’s growth potential, especially with companies today that want to speed up delivery times but not rent an entire warehouse or pay for extra transportation and shipping costs.
“Our vision is to have thousands of warehouse partners across the globe, all connected through our software platform and providing warehousing services when they have excess capacity,” Siebrecht noted. “This will create a layer of flexibility in companies’ supply chains that will unlock tremendous value in this massive market.”