Mothership — a short-haul, same-day freight logistics software startup — has moved its headquarters to Austin, and on May 10 announced it raised $76 million in funding from several well-known venture capital firms.
The funding, collected from a series of investments in the past year or so, came from Benchmark, WestCap, Bow Capital, former Con-way Freight CEO Douglas Stotlar and others.
The startup, which is technically Mothership Technologies Inc., quietly made Austin its HQ when co-founder and CEO Aaron Peck moved here from Los Angeles last year. It doesn't have an office in Austin, although it maintains one in Los Angeles. About 30 of the company's 70 employees are in Austin.
"We intentionally hold our board meetings here in Austin," Peck said. "We paid for relocation even for people that were remote. We paid for relocation out to Austin ... this is our home base."
Peck, who grew up in Southern California and played in a touring rock band before becoming a founder, said he came to Austin because it's a magnet for people looking to do new things; it has a big tech scene, but plenty of non-tech activity; and it's an easy place to attract talent.
"Austin still has this this rough-around-the-edges kind of super creative, punk rock vibe, where there's a ton of energy flowing in the city," he said. "And it's become a magnet for talent, and that to me is exciting."
Peck began developing Mothership in 2017 in a spare bedroom in the Los Angeles area. It was initially bootstrapped, largely relying on savings Peck and his early employees had from his previous startup, rental car delivery service Skurt, which was acquired by Fair in 2018.
The company helps businesses with same-day freight deliveries. Its platform has automatic matching of shippers and haulers, automatic dispatch and real-time tracking. Customers include DoorDash, Harbor Freight Tools and Happy Returns. It operates in 26 metro areas, although it hasn't yet launched services in Austin.
"We want to create this experience where our customers are able to tap a button and then something appears on the other side," Peck said.
The funding comes amid a lot of investor interest in supply chain logistics startups that can help improve delivery time and efficiency as consumers come to expect faster shipments. Austin has several logistics success stories, including last year's acquisition of Austin-based Convey by Project44 for $255 million, and, earlier this year, local startup SourceDay Inc. raised $31.5 million.
“The last two years have taught us the importance of the supply chain. I believe Mothership is leveraging technology and a marketplace model to have a bigger impact for consumers and carriers in the short-haul and final mile,” Benchmark General Partner Bill Gurley stated. “In the ongoing great logistics reshuffling, Mothership is built to help get things done in an increasingly on-demand world.”
While startup funding remained at historic levels in Austin in the first quarter of 2022, storm clouds have been gathering in the national venture capital ecosystem. Gurley is one of the prominent VCs to warn of tougher days ahead.
"An entire generation of entrepreneurs & tech investors built their entire perspectives on valuation during the second half of a 13-year amazing bull market run," he tweeted April 29. "The 'unlearning' process could be painful, surprising, & unsettling to many. I anticipate denial."
Mothership raised its funding before significant chatter about a downturn in startup funding and valuations. And, as a supply chain-oriented startup, it occupies a sector that investors have shown a lot of thirst for as some other categories have lost luster.
"This is an industry now where the best engineers and the best designers and the best people on the commercial side are interested," Peck said. "It's white hot. Everyone absolutely wants to be a part of this now. So, it is one of the verticals in tech that I think is attracting the most attention in the space."
He said that while he feels Mothership is well-prepared for downturns in segments of the startup market and is being built with the intent of going public one day, there's a lot of belt tightening in the future for many startups that grew too fast.
"It's unfortunate for a lot of companies, but it is a good reminder that you need to build a real business with real positive unit economics that isn't funded perpetually by VC dollars," he said. "You need to be eventually be charting a path to get out of that and to eventually be a public company that produces profits. And that is the reality, and I think this reset is just reminding everyone of that reality."
Austin Inno is produced by Editor Brent Wistrom. Get daily updates on fundings, hires and other news of interest to the startup community by subscribing to the Beat newsletter. And for more startup resources, check out ABJ's latest list of local venture capital firms, angel investors and startup incubators and accelerators.
