Weeks after layoffs, supply chain start-up FourKites has raised $30 million as part of an ongoing funding round, according to documents filed with the United States Securities and Exchange Commission. The filing indicates that FourKites hopes to close the round with $80 million in capital, a significantly smaller amount than the company previous roundwhich landed at about $100 million.
FourKites initially did not respond to repeated requests for comment, but reached out late Friday to clarify that FedEx’s investment was part of a strategic partnership. announced in June.
FourKites, whose clients include Coca-Cola, AB InBev and Walmart, tracks and helps manage freight shipments by road, rail, sea, air and parcel. In an interview last year, CEO Matt Elenjickal told me that the idea for FourKites came from his time as a supply chain consultant, working with companies that often struggled with the need for basic supply chain visibility.
Successful on the face of it all, FourKites has expanded its network to more than 450,000 couriers and hundreds of corporate customers. But lately things haven’t been smooth sailing.
Early August, FreightWaves reported that FourKites would lay off workers by the end of this year and that Sunset Haven, the shipping document management and tracking solution, would disappear. FourKites acquired Haven in April 2021 to integrate the startup’s document management capabilities into a new product called Dynamic Ocean. But in an internal email, Elenjickal said Haven’s software modules had proved “extremely unprofitable.”
“The real value of acquisitions is having a single global platform for all providers and all data. If you don’t integrate those systems, you end up with a lot of silo platforms that don’t deliver much value to the customer,” Elenjickal told cargo waves. “The real value to our customers comes from having one cohesive, easy-to-use solution, so we’re very strategic about how we acquire and integrate. As is industry best practice, we will terminate old acquired platforms after the integration has been successful.”
FourKites laid off nearly 8% of its workforce as part of the above layoffs, or about 60 employees in total. Most were concentrated in platforms that FourKites had acquired over the past two years but is now built into the platform, Elenjickal told JOC.com in an interview this month, including yard management solution TrackX.
Elenjickal blamed economic factors such as inflation, rising interest rates and unpredictable energy prices. “Until this year, it was growth at all costs,” he told JOC.com. “Valuation was growth divided by interest. Now it’s about the road to profitability. Not right away, but we see this taking 18 to 24 months, so let’s make sure we’re solid on the balance sheet.”
The supply chain industry has taken a hit in recent months as the economic situation shows no signs of turning around. FourKites rivals Sendy and Project44 laid off some of their staff this summer, as well as well-capitalized supply chain and logistics providers including Stord, Convoy, Slync.io and FarEye.
It’s a reversal of fortunes for a segment that was once seemingly immune to the macroeconomic headwind. Last year, funding for venture capital-backed supply chain management companies hit an all-time high of $11.3 billion, according to to Crunch Base.