Saltbox Inc., an Atlanta-based co-working and warehousing startup, raised its largest funding round to date as e-commerce sales continue to grow, according to a Nov. 29 news release.
The $35 million Series B round will be used to open at least three facilities located in Miami, Minneapolis and Phoenix, a company spokesperson said in an email. Two of which could open by the end of this year. The company will also use the funds to invest in its software.
The round brings Saltbox's total venture funding to $56 million, according to the release. In April 2021, the company raised a $10.6 million Series A round led by West Coast investor Playground Global. In March, TechCrunch reported the company got a $128 million capital commitment from investment firm Fundrise to acquire warehouses that will house future Saltbox locations.
Atlanta-based Cox Enterprises Inc. and existing investor Pendulum, a California-based investing and advisory platform, co-led the round. Other investors include Playground Global, XYZ Capital, Fundrise, Kapor Capital, Wilshire Lane Capital, Colliers, Lincoln Property Company, Flexport and Overline. Andrew Davis, senior vice president of strategy at Cox Enterprises, and Robbie Robinson, CEO and co-founder of Pendulum, will be added to Saltbox’s board of directors.
“The Saltbox team have tapped into a strategic and unique opportunity at the intersection of community and shared services in warehousing, inventory management and fulfillment,” Robinson said in the release. "This is evident in the company’s growth, and its ongoing expansion across geographies speaks to the high demand for this differentiated bundling of services.”
The raise comes as venture funding has slowed. Investors have switched a focus on growth to profitability, leading company valuations to decrease. Businesses don’t tend to seek outside capital if its valuation declined from the prior capital raise. In October, venture capital funding in the U.S. hit a nine-quarter low.
But Saltbox has tapped into a growing market, which could explain its continued growth while other technology companies cut back. At the onset of the pandemic, e-commerce sales saw a record 53.4% of growth between the first and second quarter of 2020, according to e-commerce research site Digital Commerce 360. Sales growth subsided in 2021 to single-digit growth, but 2022's third quarter saw another slight uptick to 10.8%.
Saltbox provides small and medium-sized businesses with warehouse space to store and ship products.
This year, the company expanded its warehouse network to 10 locations including a 45,000-square-foot location in Alexandria, Virginia, and a more than 80,000 square foot fulfillment center in Columbus, Ohio.
The company has two Atlanta locations, in the city's upper westside and Westside Park. Other U.S. facilities are in Dallas, Denver, Los Angeles and Seattle.
Of its more than 500 customers, over 70% are e-commerce companies that sell physical goods directly to consumers, according to the release.
The company was founded in 2019 by CEO Tyler Scriven, Maxwell Bonnie, and Paul D’Arrigo. Prior to Saltbox, Scriven bought a beauty and hair care business called True Glory Hair, which does a majority of its sales online and is now a Saltbox client.
