Baltimore ecommerce company Whitebox raised $18 million in Series B funding and is planning to continue growing its development and product teams as it builds out tech capabilities, CEO Marcus Startzel said.
The round was led by Atlanta-based growth equity firm Noro-Moseley Partners. Existing investors based in Maryland also participated: Chevy Chase-based TDF Ventures; TCP Venture Capital’s Propel Baltimore Fund; David Williams, chairman of Columbia-based performance marketing agency Merkle; and Chris Brandenburg, cofounder of influential Baltimore mobile advertising company Millennial Media. With this round following June 2019’s Series A, Whitebox has now raised $27.6 million.
The round further propels Whitebox, which has already been on a run of growth. The company works with both big brands and direct-to-consumer startups to market, fulfill and ship ecommerce orders from across different marketplaces. There are lots of details to figure out in this process to maximize value, from how to bundle a product to where to store it to how to list it. Ecommerce was already a quickly growing category, and has only expanded as the COVID-19 pandemic led many to turn to online ordering.
“The rapid growth of our business driven by products, services and value proposition, has given us the opportunity to go after a very large and sizable market,” Startzel said.
Over the second half of 2019 following the Series A, the company built out its team, including key leadership hires with experience at Amazon and in Baltimore’s adtech community, where Startzel has roots working with Ad.com and Millennial Media. It also grew a fulfillment network that enabled it to increase its value proposition, Startzel said. This investment set the company up coming into 2020 seeing an “explosion” of new clients with that expansion in place. Then, the pandemic’s boost for ecommerce brought a spike in orders for the company, and another burst of hiring that included bartenders, servers and other workers who had been furloughed.
So far this year, revenue is up 40% in Q1 of 2020 compared to the first quarter 2019, then increased 4.5 times in Q2 2020 versus Q2 2019, according to figures shared by the company.
Whitebox now has 125 employees, up from just over 40 at the Series A raise. With its offering comprising both software as well as fulfillment and shipping, it recently moved into a new 365,000-square-foot space that was a former Under Armour distribution center in Curtis Bay that is nine times the size of its former space. Whitebox also has operations in Las Vegas, which will be expanding soon to another 365,000-square-foot space for the company, and Memphis.
With the funding round, the focus is less about adding new areas operations, and “much more about building out the lanes of the highways that we’re already on,” Startzel said.
Going forward, the company is looking to add tech talent, as well as build out a sales and marketing team. It builds software to both provide insights for customers and help them advertise, as well as systems that put labels on boxes.
“We are inventing new ways to sell and move products and I think that is both an exiting and challenging thing to do,” Startzel said. “You’re trying to innovate and make sure the packages show up at the same time.”
The Baltimore HQ continues to be where all of its teams are centered and where the company pilots new offerings, so it will see the “lion’s share” of growth in tech and product, though the other locations will likely add technologists as those operations expand.
For Whitebox, a key differentiator is a focus on building specifically for the brands that sell on ecommerce. Many of the marketplaces are built with the consumer in mind, but there are two sides and the companies doing the selling have an ecosystem all their own.
“The team has built a technology platform that not only expands the tools and insights that brands need to manage their sales and fulfillment processes from top to bottom, but also powers the larger ecommerce economy by eliminating marketplace complexities,” said Alan Taetle, general partner at Noro-Moseley Partners and lead investor in the round, in a statement.