Serial entrepreneur Darrell Jervey saw the need for a two-sided marketplace within the warehouse industry and seized on the opportunity. He, along with Nick Bawa, founded Warehowz in 2017 and have steadily built the company into a powerhouse in the third-party logistics (3PL) industry.
Before starting Warehowz, Jervey ran two other companies. He had a difficult time securing warehouse space, something that is extremely important in e-commerce. Customers expect purchases to arrive quickly, and that can only occur if the company has dedicated warehouse and shipping operations around the county.
“We just had a dramatic need for warehouse space in different locations, and we simply couldn't do it, mainly because of software differences and the length of contracts was just a very complicated process for us,” Jervey said. “There’s really no reason for it to be complicated and hard.”
In 2019, Warehowz secured $950,000 in funding. A second $1.2 million round was completed in 2020. The round featured several angel investors and executives from Richmond logistics and shipping companies Estes Express Lanes and Estes Forwarding Worldwide. According to PitchBook, Warehowz secured $5 million in funding earlier this year, but no record exists in public filings. Jervey declined to comment.
“We are a venture-backed company,” Jervey said. “We are always raising money.”
The company has 16 employees, and completed the Plug and Play, a leading Silicon Valley accelerator, in 2020. Warehowz operates as a two-sided marketplace similar to Airbnb. Warehouses with extra capacity list the space on the marketplace and customers book the space through Warehowz. The company has around 2,200 warehouses across the country and works with a lot of small and mid-sized companies that sell consumer goods on Shopify or Amazon.
Initially, it was challenging to sign up warehouses onto the marketplace, but that has changed as the company has grown, Jervey said. Now, warehouse and logistic organizations seek out the company and inquire about listing extra capacity on the site.
“Today we are big enough that word of mouth and industry knowledge lead people to us,” Jervey said. “We don’t do as much active recruiting now, but we’re still adding about 50 warehouses a month.”
The company has become the "largest network of warehouses in the country," Jervey said. He believes the company will continue to grow. He sees the Warehowz becoming more involved in hiring warehouse staff and recruiting labor. The company is also adding the ability for customers to view warehouses remotely, which saves Warehowz and the client from traveling to the site. It is organizing drone tours of each individual warehouse within the network.
It recently partnered with Talentcare, a hiring and retention platform. Warehowz is using the tool to hire and retain warehouse workers.
“We work with warehouses and 3PLs every day who are limited in their ability to accept new business,” Jervey said. “The main factor is lack of available or appropriate personnel. They want to accept new business from us, and they want to be able to provide excellent servicing to our mutual clients.”
When asked for examples of success stories, Jervey mentioned an energy company on the West Coast. While not an e-commerce company, it needed extra space to store equipment and parts. The energy company started with one location and now has 16. Jervey said Warehowz has become part of the company’s business model.
He also talked about a pet products company that uses Warehowz for overflow capacity. The company’s storage needs change, and Warehowz provides temporary storage when it has excess inventory.
“Rather than sort of an afterthought or a critical space need, they have actually built it in their business model,” Jervey said.
