Last week Flexport raised a $110m Series C, placing its pre-money valuation at a whopping $800m.
This is not a company that makes photo sharing apps or design-porn hardware: it is a customs brokerage and freight forwarding service. (Jesus, just reading that can put you to sleep).
And its success is indicative of a larger trend in the startup world: boring, business-forward companies are hot right now.
An age of reckoning
A defining (if critical) trope of Silicon Valley has always been that it celebrates and funds “sexy” ideas over those that actually solve immediate business issues.
We’ve heard this again and again this year, as massively-funded startups like Sprig ($56m), Hello ($40.5), and Juicero ($120m), — all promising Earth-shattering innovations in areas like food delivery, health, and… juice — have come crashing down.
Is the era of consumer startups over?
Investors are increasingly looking past the glitz and turning to ideas that solve dull business issues.
Of the 124 startups in incubator Y-Combinator’s 2017 batch, 41 were enterprise businesses (geared toward B2B instead of consumer sales). That’s nearly double last year’s figure. Verticals like finance, infrastructure, communications, and data management are especially in vogue.
The “new sexy,” according to investors and VC funds, is a company that actually has an actionable business model…
Companies like Flexport
Reportedly, the company got funding offers from 57 investors — including valuations of over $1B — and had to literally turn people away. Apparently, their model (taking a 15% cut of the average $2k price to ship a container, instead of the industry-standard 25%) makes sense.
There are millions to be made in the banal world of business logistics.
