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Urgent logistics startup Airspace, which burst onto the market handling shipments for emergencies including organ transplants and life-saving drugs, has nearly doubled its funding in a new round of capital- venture led by DBL Partners, an impact investment firm that was an early investor in Tesla. The $70 million funding round – which also included new investors Telstra Ventures and HarbourVest, as well as existing investors Scale Ventures, Defy Ventures, Qualcomm Ventures and Prologis Ventures – brings Airspace’s total funding to $138 million .
The investment is an indication of the rapid growth of logistics start-ups during the pandemic years, as global supply chain issues create new opportunities for disruptive business models. With the arrival of DBL Partners, which focuses on ‘double bottom line’ investing, it is also raising the profile of sustainability within the business model of logistics companies and throughout the global supply chain.
Airspace noted in a statement that many of its biggest customers are increasingly focusing on carbon neutrality.
“Airspace is unique in its ability to provide full transparency on the carbon footprint of urgent deliveries, enabling customers to optimize routes with the least environmental impact possible,” said Ira Ehrenpreis, Founder and Managing Partner of DBL Partners, in a press release. .
Ehrenpreis is a member of Tesla’s board of directors, and DBL has invested in several solar energy companies (including SolarCity, now part of Tesla), as well as Elon Musk’s SpaceX and previous CNBC Disruptor 50 companies, such than Apeel Sciences, which focuses on waste from the food system.
Joel Hwang, director of HarbourVest, also received a seat on Airspace’s board.
Airspace uses AI and machine learning to optimize delivery opportunities around the world, and it provides real-time data – up to 16,000 “touchpoints” – on shipments.
The company, which was founded in 2016 and has offices in Carlsbad, Calif., Dallas, Stockholm and Amsterdam, recorded 110% growth last year and said it was on track to match that growth this year.
“With supply chain disruptions continuing to affect countries around the world, never in history has time-sensitive shipping and logistics been more critical to ensuring these complex and sensitive shipments reach their destinations. on time,” said Nick Bulcao, co-founder and CEO of Airspace. , stated in the press release.
Airspace, which ranked No. 39 on the CNBC Disruptor 50, is one of ten logistics companies to make the annual list, the largest of any industry in 2022, as the global crisis supply chain has raised the profile of disruptive start-ups taking technological approaches to global shipping issues and growth have garnered increased attention from investors.
Several of the top logistics startups listed on the CNBC Disruptor 50 have made sustainability issues a key business objective in what is an often inefficient and carbon-intensive transportation sector.
Between 15% and 40% of carbon emissions from truckloads can be eliminated through more efficient shipping, according to Flock Freight, which was the first freight company to achieve B Corp status. profits. Flock Freight has focused on eliminating “empty space” in trucking, with many trucks only 60% to 70% full when they hit the road, which is both inefficient as a logistical and unnecessary approach to climate impact.
Airspace noted that many commercial aircraft are taking off with low capacity utilization in cargo holds, one of the data points it can track and leverage as it seeks alternative transportation options for customers.
Flexport, the No. 1 disruptor this year, recently received a $900 million round of venture capital and saw its annual revenue increase by billions during the supply chain crisis – it is on track to generate more than $5 billion in revenue this year.
“Historically, if you just needed shipments at a steady cadence, it was enough to travel by ocean, road or rail, but with all of this disruption, people moving on the ocean have gotten a lot geared toward air cargo,” Airspace said. chief operating officer Ben Kozy in a recent interview.
Suppliers and shippers have changed their mindset about using a single mode of transport.
“The global supply chain that has just been impacted by the pandemic and labor shortages and growing consumer demand for products,” Kozy said. “All of this has removed the relative certainty of logistics, taken it away, and suppliers are scrambling for new means of transportation,” he added.
The funding will be used to increase Airspace’s focus on Europe and Asia, as well as customers in new sectors where time-sensitive deliveries are critical, including semiconductors, automotive and cleantech. Europe accounts for more than 10% of revenue, up from 1.5% in 2020, according to Airspace, and the company now operates in 134 countries.
“Our goal is to be able to ship the most packages to any destination, regardless of size,” Bulcao said in the statement.
To date, Airspace has completed over one million shipments.
The global auto industry has been hit by multiple chip shortages over the past two years, necessitating waves of temporary plant shutdowns at major automakers. Earlier this month, Ford said chip shortages plaguing the industry persist and the automaker is forced to prioritize ship supply for the most in-demand models.
Although his roots are in the medical market, Kozy told CNBC that as airspace expands, it allows more customers to define what is “essential” for their business. The inherent need to move organs quickly for transplantation is a business model that can now be applied to an automaker’s plant that is down due to parts not arriving. “What’s critical is the lead time it needs to be delivered,” Kozy said.
Recently, Airspace has also found a market in items as diverse as high-end coffins, high-end aprons and spas.
“Our model allows us to act quickly, in less than 24 hours, once the client has made their decision,” Kozy said.
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