Our Investment in Airhouse — the Modern Fulfillment for High-Growth Brands
The unstoppable rise of Ecommerce: The rise of ecommerce — accelerated by the pandemic — may be one of the most significant shifts in retail behavior in modern history. Looking at the numbers, US ecommerce sales in 2021 were around $871 billion, more than quadrupling from $200 billion in 2011. Ecommerce sales as a percentage of total retail were approximately 13% at the end of 2021, although down slightly from 15.7% at the height of the pandemic, it is still significantly higher than the 5% penetration seen a decade ago. Ecommerce has touched every conceivable consumer product category from cars (Carvana), clothes (Stitch Fix), glasses (Warby Parker), and groceries (Instacart), and the growth in this sector is seeing no signs of decline.
Haves and Have-nots Divide: Not all of this growth, however, has been equally distributed; market share has tended to go towards players that have the end-to-end supply chain apparatus to handle massive ecommerce volume. Amazon, the paragon of efficient logistics, finished 2021 with $302 billion in sales in the US, which means they had a staggering 35% market share of all US ecommerce. Legacy brands and retailers like Walmart, Apple, Best Buy, and Target have also leveraged their existing infrastructure to pivot reasonably well into the age of online shopping, thereby carving up the rest of the pie.
There have certainly been innovations in ecommerce software in the past ten years in digital storefronts (Shopify), checkout (Bolt), payments (Stripe), and marketing (Klayvio). They have altogether lowered the barrier to entry into online commerce, especially for DTC and digitally native brands. However, there is the other side of online commerce, which is logistics. It is still difficult for smaller players to access world-class 3PLs and warehouses that big companies can leverage, especially without deep connections in the industry, pricing power (i.e., small volume), and the engineering chops to integrate into antiquated 3PLs systems.
A Modern Fulfillment Solution for Modern Brands: Airhouse is that end-to-end logistics software platform that takes the heavy load off DTC and digitally-native brands companies to find, integrate into, and manage their 3PLs. Airhouse does this by securing partnerships with a network of top-tier 3PLs around the world, while solving the various software, pricing, and process inefficiencies that currently exist in the logistics world. Brands can then connect their digital store to Airhouse, gain access to all the partnering 3PLs at affordable rates, and then get back to doing what they’re actually good at: creating an amazing product that their customers love. In many ways, Airhouse is democratizing access to Amazon-level logistics without having to surrender the margin that Amazon takes when selling through its sites. Airhouse customers rave about the flexibility in time, energy, and resources that the platform gave them and how it made it much easier to launch and scale the logistics.
But for all of the great market tailwinds and customer testimonials, ultimately DNX invests in teams. We’ve gotten to know Kevin and Sarah, the two talented co-founders of Airhouse, for over two years, and every time we speak with them, we leave even more blown away by the combination of their vision, focus, and speed of execution. Being that both were executives from Shyp, we’ve loved watching how they’ve turned their battle scars into invaluable mental models.
DNX is leading Airhouse’s Series A, and we are excited to join the Airhouse team on their journey. We believe that Airhouse will be one of the iconic names in the ecommerce logistics industry. If you’re interested in joining this stellar team, they’re hiring.