Amazon Delivery Rival Pandion Secures Funding for Expansion
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E-commerce logistics startup Pandion — which helps retailers like Saks Fifth Avenue compete with Amazon.com Inc.’s speedy delivery — has secured $41.5 million in fresh funds to expand its operation.
The investment, led by Washington-based venture capital firm Revolution Growth, will be used to hire executives and open new warehouses around the country, including the Pacific Northwest and Minneapolis regions, said founder and CEO Scott Ruffin. The company didn’t disclose its current valuation, which PitchBook in October estimated at $320 million.
Pandion focuses on the so-called middle-mile, after customers’ orders are packed and before they’re shipped to homes. The startup sorts packages by ZIP code and uses software to find the most efficient delivery path via a network of carriers and delivery apps that collectively tap more than 500,000 drivers.
Pandion, which launched in stealth mode in 2020 and says it reaches more than 80% of the U.S. population, already has facilities in the Philadelphia, Dallas, Los Angeles, Atlanta and Chicago metropolitan areas. Pandion expects to have sales of as much as $220 million this year.
Meet Revolution Growth’s newest portfolio company, Pandion — the logistics startup purpose-built for e-commerce shipping. 📦
Read up on the company's $41.5M #SeriesB & how its solutions are helping more businesses compete on delivery at speed & scale. ⤵️ https://t.co/BhShTcjRe0 — Revolution (@revolution) March 21, 2024
The Revolution Growth investment, announced March 21, is a rare vote of confidence at an otherwise bleak time for logistics startups. Many over-expanded during the pandemic-era e-commerce boom only to lay off workers and retrench once the surge in online sales abated.
Seattle-based Convoy, which investors valued at $3.8 billion in 2022, punctuated the industry’s troubles when it abruptly shut down in October. San Francisco freight forwarding startup Flexport, which has raised more than $2 billion and was valued at as much as $8 billion, has laid off hundreds of employees in an effort to return to profitability after business soured last year.
Convoy Inc. ranks No. 54 on the Transport Topics Top 100 list of the largest logistics companies in North America.
E-commerce logistics and delivery startups raised just $100 million in 2023, down from $2.1 billion in 2022 and $3.7 billion in 2021, according to data compiled by PitchBook.
Pandion has expanded more judiciously, according to Ruffin, whose 25 years in the logistics industry include stints at Amazon and Walmart Inc. “We are only putting facilities where we are confident they’ll make money, and we’re not building fleets of vans and drivers, which has helped us control costs,” he said.
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The company has positioned itself as an alternative to UPS Inc. and FedEx Corp. in a domestic shipping industry worth about $200 billion a year, Revolution Growth partner Kristin Gunther said.
“Consumers are trained to get packages at a certain speed, and a lot of other retailers can’t fulfill that promise even though they’d like to,” she said.
Pandion also announced it hired several executives, including Chief Operating Officer Brent Cervenka, who previously worked at Flexport, Target Corp. and Amazon.
UPS ranks No. 1 on the Transport Topics Top 100 list of the largest for-hire carriers in North America. FedEx ranks No. 2.
