Sean Henry, 24, and Jacob Boudreau, 22, founded flexible warehousing startup Stord while in college at Georgia Tech in 2015. They made the cut for Forbes 30 Under 30 in 2018, and Henry, who dropped out of college, won the prestigious Thiel Fellowship the next year. Today, Atlanta-based Stord hit a new milestone: With shipping surging in advance of the holidays and customers expectations for lightning fast delivery at a fevered pitch, the company raised $31 million, led by Peter Thiel’s Founders Fund, Henry told Forbes.
The new funding brings Stord’s total investment to $46 million, and its valuation to roughly $200 million. Henry now says he hopes to join the ranks of Under 30 founders with companies on Forbes’ Next Billion-Dollar Startups list. Revenue is expected to approach $50 million this year, a roughly seven-fold increase over last year, and Henry expects it to surpass $100 million next year.
“We’re in rapid growth mode,” he says. “There’s a cultural shift for these brands, driven by Covid, to realize they can’t build their supply chains flexible enough or adaptive enough.”
Founders Fund partner Trae Stephens, who led the recent investment, figures that over the long term, as companies realize how critical supply chain is to their operations, Stord could build a multi-billion-dollar business in a vast market. The cost of logistics in North America totaled $2.1 trillion in 2019, according to logistics consultants Armstrong & Associates. “These are incredibly fragmented markets where no player owns more than a few percentage points,” Stephens says.
“There’s a cultural shift for these brands, driven by Covid, to realize they can’t build their supply chains flexible enough or adaptive enough.”
Henry first got the idea for Stord as a teenaged eBay seller who was struggling to fulfill orders for electronics parts—and wondered why there wasn’t a better way. He was a a freshman at Georgia Tech when he started the company. He recruited Boudreu, who was then just 18, as cofounder and chief technology officer.
Rather than owning warehouses, as industry giant Prologis does, Atlanta-based Stord uses software to connect businesses in need of storage and distribution to independent warehouses with excess capacity. It manages everything from ordering to inventory management to billing on its proprietary software.
Its network model gives it flexibility—key to its success generally and critical during the pandemic. “Covid has created a dynamic where people who used to go to the store are buying online, and they want their products faster and faster,” says Jeff Raider, cofounder of Harry’s and Warby Parker, who invested in Stord’s latest round through Good Friends fund.
With its network of warehouses, Stord helps direct-to-consumer online retailers—and those that have struggled to rapidly shift their businesses from brick-and-mortar to online—keep pace with consumer expectations and with Amazon. To help it do so, Stord hired Steve Swan, who had spent nearly seven years in logistics at Amazon, as its vice president of supply chain in October 2019.
“We’re trying to give them Amazon-level logistics for all,” Henry says. “We’re trying to level the playing field.”
Henry says that the company is now moving close to $10 billion worth of product across the country, and has developed a cloud-based software platform that connects a network of more than 500 warehouses and over 20,000 carriers. Just as software has upended other large, staid industries, so, too, logistics.
“Supply chain is becoming really complex and needs a unified operating system,” says Ilya Fushman, a partner at Kleiner Perkins, which is an investor in Stord. “Stord’s position of providing software to connect warehousing and freight and eventually other models of transportation can become that operating system.”
While numerous digital freight operations have already sprung up, including Transfix, Next Trucking and Uber Freight, Henry sees opportunity in combining warehousing with freight as both become enabled by technology. “The customer gives you their freight because you hold the inventory for them,” he says
Stord’s Sean Henry first got the idea for the company as a teenaged eBay seller struggling with logistics.
Stord’s customers include brands like Owens Corning, Dollar General and Advance Auto Parts. Intertape Polymer Group, which makes water-activated tape, air pillows and other supplies used by e-commerce retailers (think Amazon, Walmart etcetera), started working with Stord two years ago after getting a cold call.
At first, the Montreal-based company, which has more than $1 billion in annual revenue, simply agreed to let Stord set up a midwest warehouse. Since then, it has expanded its network with Stord and integrated data from its transportation manager into Stord’s software. Eventually, IPG could switch its entire warehouse business over to Stord, says Zachary Kissel, IPG’s vice president of ecommerce services. “There’s not a lot of red tape,” he says. “They are just a bunch of problem-solvers.”
As a young founder running an fast-growth company, Henry says he had to learn how to hire a team (now 130 people) and keep pace with the business. Getting the Thiel Fellowship and connecting with other young founders one or two steps ahead in the growth trajectory was key, he says. “The hardest part is the ‘unknown unknowns.’ We haven’t worked for years in a massive organization,” he says. “Jake and I had to grow a lot as leaders as we’ve scaled the business.”