EquipmentShare invests in digital platform for metals
07 June 2022
US rental and technology firm EquipmentShare has led a US$19 million funding round for Felux, an online B2B marketplace and supply chain platform for steel and other metals.
The funding will be spent on a project to digitise commerce for the industrial supply chain, including accelerating Felux’s growth and product offerings, as well as its employee headcount in the coming months.
Headquartered in Cleveland Ohio, Felux, was founded in 2019 by Dallas Hogensen, Chris Day and Todd Leebow.
It describes itself as “a platform built by steel and technology experts,” which digitises the supply chain to allow steel and metal buyers and sellers to source, procure, ship and finance products in an “end-to-end digital experience.”
William Shlacks, President of Equipmentshare told IRN; “At EquipmentShare, we always have our eyes on what will make the construction industry more efficient. Our research and development teams work alongside other innovators like Felux in the space to explore cutting edge products and concepts that will continue to enhance the industry.”
Felux allows customers to share inventory through digital channels and get access to freight and lane pricing in real time. The company has recently expanded into aluminium and is planning to bring other adjacent markets onto the platform including copper, stainless steel and scrap metal.
It has three key offerings including a digital platform to help bring suppliers online and create a digital presence; a marketplace to buy and sell materials; and a materials and procurement platform to help large manufacturers manage quarterly and annual contracts. It also provides freight pricing and financial tools to its customers.
The company has raised a total of $24m in the last 10 months and has experienced rapid growth, facilitating $454m of transactions on the platform in 2021, up from $64.9m in 2020. It has 1,000 customers across 1,700 locations, including several Fortune 500 manufacturers, as well as steel mills and service centres across the US, Canada and Mexico.
It is also positioned to expand into adjacent markets such as aluminium, copper, stainless steel and scrap metal with plans to add several other commodities and physical goods in 2023 and 2024. It is also expanding its offering to new global markets with plans to launch in the $460bn European market in late 2023.
Equipmentshare’s platform hosts around 60,000 machines, almost half of which it owns directly. The platform provides contractors with insights on equipment utilisation and more, helping contractors to manage their fleets more efficiently.
Part of its vision is to increase construction productivity across equipment, construction materials as well as labour. As well as digitalising the equipment supply chain, its aim is to make the same transformation in the arena pf materials.
A statement on the deal said; “The steel and metal market is one of the last remaining major industries to turn digital with more than 95% of transactions still offline and paper-based. Steel companies and manufacturers grapple with outdated quoting and negotiation processes and a lack of transparency on the movement of goods.”
“The market opportunity of digitising the industrial supply chain is significant: the US steel and aluminium market is worth approximately $385 bn annually. The global metals market was valued at more than $3.3 tn in 2020, and is expected to grow at a rate of more than 6% annually to more than $4.6 tn in 2025.
The Series A funding round also included finance from investment business Signia Venture Partners, venture capital specialists Suffolk Technologies, Expa, Lightbank and 8VC, along with JumpStart Ventures, which provides pre-seed, seed and Series A funding to tech startups.