Weeks after laying off workers, supply chain startup FourKites has raised $30 million as part of an ongoing financing round, according to documents filed with the U.S. Securities and Exchange Commission. The filing indicates that FourKites hopes to close the round with $80 million in capital, a substantially smaller amount than the company’s previous round, which landed at around $100 million.
FourKites didn’t respond to repeated requests for comment.
FourKites, whose customers at one time included Coca-Cola, AB InBev and Walmart, tracks and helps manage freight shipments across road, rail, ocean, air and parcel. In an interview last year, CEO Matt Elenjickal told me that the idea for FourKites evolved from his time as a supply chain consultant, where he worked with enterprises that often struggled with the need for basic supply chain visibility.
FourKites is by most appearances successful, having grown its network to over 450,000 couriers and hundreds of corporate clients. But it hasn’t been smooth sailing lately.
In early August, FreightWaves reported that FourKites would lay off workers and sunset Haven, its ocean shipping document management and tracking solution, by the end of this year. FourKites had acquired Haven in April 2021 to integrate the startup’s document management capabilities into a new product called Dynamic Ocean. But in an internal email, Elenjickal said that Haven’s software modules had proven to be “highly unprofitable”
“The real value in acquisitions comes in having one singular global platform for all providers and all data. If you don’t integrate those systems, you wind up with a bunch of siloed platforms that don’t deliver much value for the customer,” Elenjickal told FreightWaves. “The real value for our customers comes from having one cohesive, user-friendly solution, so we’re very strategic about how we acquire and integrate. As is industry best practice, we sunset old acquired platforms after that integration is successful.”
FourKites let go nearly 8% of its workforce as part of the aforementioned layoffs, or about 60 employees in total. Most were concentrated in platforms that FourKites had acquired over the past two years but has now built into its platform, Elenjickal told JOC.com in an interview this month, including yard management solution TrackX.
Elenjickal blamed economic factors like inflation, raising interest rates, and unpredictable energy prices. “Up until this year, it was growth at any cost,” he told JOC.com. “The valuation was growth divided by the interest rate. Now it’s about the path to profitability. Not immediately, but we see this lasting 18 to 24 months, and so let’s make we’re shored up on the balance sheet.”
The supply chain industry has taken a hit in recent months as the economic situation shows no signs of turning around. FourKites rivals Sendy and Project44 let go of a portion of their workforces this summer, as did well-capitalized supply chain and logistics vendors including Stord, Convoy, Slync.io, and FarEye.
It’s a reversal of fortunes for a segment once seemingly immune to the macroeconomic headwinds. Just last year, funding for venture-backed supply chain management companies reached an all-time high of $11.3 billion, according to Crunchbase.