There’s no turning back from shopping online. E-commerce totaled $453 billion last year, representing 13% of total retail sales and up 16% year-over-year, according to a U.S. Commerce Department report.
The explosion means warehouse space and location play increasingly important roles.
“If you are selling online, you need to be close to your customers,” said Ben Eachus, co-founder and chief executive of on-demand warehouse space provider Flowspace Inc. in Irvine. He previously oversaw fulfillment and operations at The Honest Co., a consumer goods company founded by actress Jessica Alba.
“You really have to have multiple [warehouse] locations to save on shipping cost and shipping time … the way to do it is to have more distribution points, not pay more money for expedited shipping,” he said.
Eachus and co-founder and Chief Technology Officer Jason Herbert started Flowspace in May to provide an easier, less expensive option for small- and midsize businesses to better compete with large companies on warehousing, fulfillment and delivery.
“When you are a growing company, and you have an unreliable forecast, you are always in a situation, either you don’t have enough [warehouse] space or too much space,” Eachus said. He said companies that are not big enough to afford a multiyear lease for their own warehouse are either paying for space they don’t need or spending a lot of time looking for and negotiating with individual warehouses to carve out spots for short-term rental.
Flowspace allows companies to rent portions of warehouses month-to-month. Warehouse staff will handle receiving and shipping. Eachus said the average size fits 200 pallets, or about 2,000 square feet.
The company secured $1.2 million in seed funding in November. Investors included Y Combinator, Moment Ventures in Palo Alto, 1984 Ventures and WndrCo LLC, both in San Francisco, Vy Capital in Dubai, PLG Ventures in Los Angeles and Dallas-based CES Investments. It now has over 100 warehouse partners and has expanded its footprint beyond California to include Phoenix, Las Vegas, Atlanta, New Jersey and Houston.
Eachus said its headquarters make sense because Southern California is uniquely positioned as a major hub for on-demand warehousing.
“OC is a great place to be. Within an hour drive, you can get to the largest logistics markets—the Port of Long Beach, the Inland Empire, Los Angeles and Ventura County,” he said.
The company has eight full-time employees.
—Sherry Hsieh
OC Expansion
Seattle-based startup Wrench has expanded its mobile car repair service to Orange County, where it plans to hire six to eight mechanics this year.
Customers can schedule services at home or the office through the company’s website or via an app, with upfront, fixed-price quotes. The service is billed as saving two to three hours of travel and service time.
The company was established in 2015 and launched services in Seattle a year later.
It serviced more than 30,000 cars last year and also has operations in Phoenix, San Diego and Portland, Ore.
Wrench mechanics must pass background checks and have an Automotive Service Excellence certification.
The company says its prices are on par with independent car repair shops and 15% to 30% cheaper than dealerships. Repair work is backed by a 12-month, 12,000-mile guarantee.
The company wouldn’t disclose revenue.
Wrench has raised more than $5 million. Investors include original Amazon backer Madrona Venture Group, and RedFin and Rover, and angel investors from Facebook, Expedia and Microsoft.
—Chris Casacchia
Electric Raise
Newport Beach-based consulting firm Altos Business Group has helped a South Korean startup blow past its $10,000 Kickstarter goal.
Allectrics Inc. in Seoul has raised over $71,000 for Bluetooth smartphone-app multimeter Vion.
Multimeters are used to diagnose and troubleshoot electrical problems in a variety of household products, such as electronics, motor controls, power supplies and wiring systems.
Typical units measure voltage, current and resistance.
The Kickstarter campaign, which launched March 13 and ends April 26, has attracted more than 1,000 backers.
Allectrics plans to use the funding for product development, marketing and sales as it seeks distributors and retailers, according to Altos Business, which has an office in Korea.
The firm was established in 1999 and serves small businesses and startups.
—Chris Casacchia
