Adrian Sulyok
This investment, part of a series of transactions between the two companies, includes convertible notes into Flexport equity. In 2023, Shopify sold its loss-making logistics business to Flexport, gaining a 13% stake, and invested an additional $40 million in cash as part of the deal. Following these transactions, Shopify’s total stake in Flexport has risen to 17%, as per Shopify’s regulatory filings.
At its peak in early 2022, Flexport was valued at $8 billion. However, the company faced a steep decline in freight rates post-pandemic, leading to a $300 million cash burn in the first half of the last year. This situation prompted founder Ryan Petersen to reassume the CEO position, replacing Dave Clark. Despite having “$1 billion in net cash” at the time of Petersen’s return, Flexport laid off 20% of its staff to mitigate sluggish market conditions and integrate Shopify’s warehousing and shipping logistics operations.
Flexport’s partnership with Shopify extends beyond financial investments. Shopify designated Flexport as its preferred partner for fulfillment, a significant endorsement considering Shopify’s vast merchant network. However, recent developments indicate a shift in this relationship. In August, Shopify added integration for Amazon’s Buy With Prime checkout and fulfillment service, potentially reducing its reliance on Flexport for merchant fulfillment. This move introduces new dynamics in Flexport’s operational strategy, considering Amazon’s emerging role in Shopify’s fulfillment options.
