Stord
As large swaths of the country began shutting down in mid-March, 23-year-old Sean Henry was finalizing his company’s first acquisition. Atlanta-based Stord, a cloud-based warehousing platform, had spent months finalizing plans to buy transportation provider Cove Logistics to build out its freight capabilities.
“The market has changed since we originally made this decision and decided to go down this path… there are certain macroeconomic uncertainties now,” explains the company’s CEO Henry, who made the 2018 Forbes Under 30 list alongside cofounder Jacob Boudreau. “But based on the rapid acceleration of our customer base’s supply chains, we decided to continue to push forward and ultimately finalize the acquisition.”
Today, the company officially announced that it had purchased Springfield, Missouri-based Cove Logistics for sum under $10 million. All 15 of Cove’s employees will join Stord as part of the company’s new Sprinfield freight office. With $15 million in funding from investors like Kleiner Perkins and Revolution, Stord now has 85 employees across four locations.
Henry cofounded Stord in late 2015 while still attending the Georgia Institute of Technology. By the time he and Boudreau raised the company’s first round of funding in 2018, he had dropped out of college to become a Thiel Fellow and build the company full time.
Since its inception the supply chain company has never actually owned any warehouses. Instead, its proprietary software connects consumer-product companies with independent warehouses with vacant storage space, even in towns with just a few thousand people. This allows Stord’s clients like Dollar General DG and Advance Auto Parts AAP to use hyper-localized distribution centers, while avoiding the cost of actually owning and operating the warehouses.
Though the company had mastered warehouse management, they realized they needed to build out their transportation capabilities to streamline supply chains for their customers. The vast majority of Stord customers are B2B businesses that move products in and out of facilities via freight trucks. The company estimates that $1.2 billion is wasted on the lag time between transferring product from warehouses to transporters. By handling both aspects, Stord nearly eliminates that cost.
In late 2019, Stord began trying to build out transport capabilities organically. But they quickly realized that they could rapidly scale by acquiring a company like Cove, which already had over 100 customers and boasted a 99% on-time delivery.
“It came down to four things: the intellectual capital, the infrastructure, the existing customer base and the execution,” explains Henry. “This also shows our investment in the longterm vision we have of building a cloud-based distribution network for companies and leading brands who are out there trying to compete with Amazon AMZN , trying to get better speed of delivery.”