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As the old saying goes: without the numbers you are just a person with an opinion. But when it comes to Flexport, one of the fastest-growing young companies in America, opinions matter – a lot – because the numbers are hard to come by, to say the least.
There’s nothing wrong with that. Private companies backed by venture capital – from which it has raised about a third of a billion dollars so far – often hide their financials until they hit the public ...
Comment on this article
Gary Ferrulli
September 10, 2018 at 3:22 pmYou can look at some of their numbers – volume handled into and out of the US.
PIERS, ZEPOL and others have volume information that one can glean what exactly Flexport does vs what they say thy do. The seem to do good press releases, not sure they meet some of the claims in those press releases. 50% increase in two weeks?? from 10 to 15? of 10,000 to 15,000? makes a difference.
Ale Pasetti
September 10, 2018 at 4:33 pmThanks, Gary. There is no official data out there for Flexport, and as far press releases are concerned, we received one today concerning Flexport Capital, but again there are no numbers worth a mention. Do you have access to Piers and Zepol?
Gary Ferrulli
September 11, 2018 at 3:32 pmI saw some numbers they made in a press release about a year ago that talked about volumes and valuation of the company. I did have access to both Zepol and Piers
and they showed only about 20% of the volume claimed by the Flexport press release. I no longer have that access. I do have associates who can get recent numbers and I’ll see what I can find for 2018.
Ale Pasetti
September 11, 2018 at 3:57 pmThat is one problem, talking of reliable data and sources. If you get hold of any interesting volume stats I’d love to see them! You can reach me here: [email protected]. Many thanks, Gary!
Ale
September 25, 2018 at 4:21 amSeen this JOC story, Gary? https://www.joc.com/technology/flexport%E2%80%99s-ascent-raises-valuation-and-volume-questions_20180918.html
It confirms what we have been saying about the numbers, and there is also a reference to PIERS. Volumes estimates are really close to some of the estimates I came up with in my previous coverage here:
https://theloadstar.com/market-insight-flexport-focuses-market-share-can-hit-targets/
…and here:
https://theloadstar.com/market-insight-flexport-silicon-valley-darling-whats-worth/.
Best,
AP
Gary Ferrulli
September 25, 2018 at 4:00 pmI saw the JOC article (I write for them monthly for past 15 years), and I
commented on it on-line. Flexport seems to put out press releases that
media picks up and publishes as an article, none of them check the accuracy
of the information in the press release. Piers showed Flexport at about 200 teus a month, but that is 4 month old data.
Ale Pasetti
September 26, 2018 at 11:18 am200k Teu monthly or 200k Teu annualised?! It was 80k Teu last year, according to S. Manders. Thanks for the exchange, Gary, it was helpful.
Gary Ferrulli
September 26, 2018 at 3:00 pmWhat I saw in Piers was 200 teus a month – not 200k per anything. I know what
they claimed in press release, but couldn;t come close to verifying it and when I
ran Piers data it showed a little over 200 teus a month.
Ale Pasetti
September 26, 2018 at 3:06 pmThanks for the follow-up. No, really, 200 Teu a month doesn’t make sense, even if it was only for its core route, and confirms what we said previously about data reliability, IMO. Thanks, GF.
Peter W
October 03, 2018 at 11:25 amThe JOC article is an odd one. It is not well researched, and appears at best, to including a lot of guessing.
I would for one, enjoy reading an article the the VCs are asked of their view and opinion. What is it they see in this? Or ask some of the publicly known customers, what difference they experience, if any.
VCs know exactly how to value a traditional freight forwardersl. Likewise a technology company. They know what they sell for or IPO at. They do this exercise daily. Does anyone think VCs would keep pouring money into the likes of Flexport, if there was no really revenue or volume growth behind it? I highly doubt that. These large VCs will perform their due diligence in any investment they make.
The communication from Flexport itself is sporadic and inconsistent. They are not obliged to give us anything, but maybe it is about that time, where a bit more information could be released. Maybe keeping this tight is just seen as an advantage.
Allesandro; have you been able to get an interview with Ryan Peterson to discuss Flexport and question the facts?
Ale Pasetti
October 03, 2018 at 11:51 amMany thanks for your comment, Peter.
I talk to VC players (I worked with a couple of VC funds, too, in the past couple of years), but as you might imagine lots of that talk is mainly background.
Ryan Peterson has traditionally been very open to talk to us – and, more broadly, to other outlets. His 2017 podcast with The Loadstar can be found here: https://theloadstar.com/wednesday-podcast-behind-flexport-phenomenon-ryan-petersen/… but there remains very little visibility on the numbers, so I have probably little to add to the debate in that respect, even if I managed to talk to him.
(That said, I surely plan to ask Ryan to talk to me on record for my next column. Hope he’ll agree to share some more insight on the financials.)
Re: “The communication from Flexport itself is sporadic and inconsistent. They are not obliged to give us anything, but maybe it is about that time, where a bit more information could be released. Maybe keeping this tight is just seen as an advantage.”
You are absolutely right, it doesn’t have to disclose the numbers and it will likely do so only if it makes sense for its exit (IPO/sale) plan, whenever/if that happens.
Re feedback from the marketplace, I think you might want to give a look to the comment section of a Flexport story I wrote some time ago (link here: https://theloadstar.com/market-insight-flexport-focuses-market-share-can-hit-targets/). Specifically, look for Marc Whittaker’s comment.
Best regards,
Ale
Eric Johnson
October 03, 2018 at 2:31 pmPeter, happy to discuss this further, but my experience is that many VCs (I’ve spoken to at least a dozen, some in supply chain, some outside) don’t always do as much granular due diligence as the market may think. They are often placing bets on industries they think are ripe for change, and more than that, they are placing bets on founders they think can build transformative businesses. It’s really a mix of underlying fundamentals and culture and personality and perception.
Regarding our research for our piece on Flexport, we’ve looked into the topics explored in this story for most of 2018 as a team. I’ve personally reported on Flexport since 2015, including two dozen or more phone and email conversations with Ryan (who is very open and generous with his time).
There is necessarily some guesswork from the industry and VCs in this piece because we’re talking about the inner workings of a private company. But that guesswork is based on their expertise of their own industries.
I’ve also written multiple pieces (3 by my best guess) at American Shipper and JOC where I dive into how VCs view the logistics market and the pros and cons of VC funding vs bootstrapping. Feel free to reach out if you’d like to discuss this sometime. Always eager to hear new perspectives.
Ale Pasetti
October 03, 2018 at 2:50 pmMany thanks, Eric, for your comment.
I second what you said, adding that your article was a very comprehensive and detailed summary of what is going on with Flexport. Some of the numbers used in the story were also consistent with one-off replies scattered on social platforms… (see, for example, the last chart of this story with regard to volumes/Fedex/Panalpina).
Best regards,
Ale.
Peter W
October 03, 2018 at 9:01 pmThank you Eric and Ale. Great discussion. And I agree very much with some points of Eric.
I will add on VCs; they will perform due diligence. I agree your seed funding, or series A, at small valuation, might be seen as a bet on an industry in broad. When you raise series C at a billion dollar valuation, then stakes are higher, and you will be working with milestones of some sorts. Someone will audit your progression towards the goal.
I notice they raised $100m outside funding round from a Chinese company. What is your take on this, and would it be considered a series D, with new valuation?
Ale Pasetti
October 04, 2018 at 10:39 amThanks, Peter.
The latest round was labelled as a “Series C” funding, and there could be more of that kind of financing at this stage, I think. We could speculate on the current value/NPV of Flexport, but the financials hardly justify a $1bn enterprise value, based on the information available, IMO.
In its latest interview, Ryan Peterson clearly said that winning large, new clients is not easy and takes time, so it is safer now to keep an eye on the next developments and, hopefully, the company will disclose additional financial information going forward.
Thanks for the exchange!
Best regards,
Ale