A startup that cracked the code on ultrafast delivery for companies like HelloFresh just raised $20 million. Here’s how AxleHire’s CEO plans to snatch market share from UPS and FedEx.

Axlehire mealkit delivery

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As companies like UPS and FedEx dealt with the pandemic-induced boom in e-commerce, delivery delays became the norm — and a disaster for time-sensitive food shipments.

Any company that could help navigate the myriad supply chain disruptions stood to win big — and San Francisco-based delivery startup AxleHire was one of the winners. 

“FedEx and UPS were declining volumes,” AxleHire CEO Adam Bryant told Insider. “We were the beneficiary.” The company’s package volume increased 50% from November to December when national carriers were at their most overwhelmed, according to Bryant. And 2020 revenue was nearly four times the previous year. 

The startup is looking to capitalize on that momentum with a $20 million Series B round led by Ajax Strategies, with Eclipse Ventures, Quiet Logistics, Bee Partners, and Acorn Pacific Ventures also participating.

AxleHire facilitates same-day and next-day delivery in major cities for any company that values speed — mainly perishable products. The startup launched in 2015 and quickly took off with meal kit companies due to their unique shipping needs. It now covers Dallas, Houston, Los Angeles, San Diego, San Francisco Bay Area, New York, Phoenix Portland, and Seattle. 

“The inventory is essentially a ticking time bomb from a freshness perspective. The customers are waiting for their order to eat so the stakes are higher. And the packages tend to be larger because it’s a week’s worth of meals,” Bryant said. 

For any perishable shipper without the right preparation, 2020 was “brutal,” according to Charles Kim, vice president and head of distribution and logistics for prepared meal company Freshly. 

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Beyond perishability, meal kit companies have to be sure not to sell more than they can produce or deliver since you can’t backorder dinner. When carriers falter or suppliers don’t deliver, companies could be forced to respond by ratcheting down marketing efforts and intentionally …read more

Source:: Businessinsider

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