At Expa, we love investing in marketplaces and have been spending more time specifically in B2B marketplaces. While there is an “Uber for X” for almost anything in consumer these days, the B2B segment is even bigger, with massive industries still largely conducting business over email, fax, and with paper checks.
Enter Felux, a B2B marketplace transforming the global steel and industrial metals industry.
As we first began diving deeper into this space, we were blown away at the complexities of the supply chain and the large volumes and analytics (often on Excel spreadsheets) that went into every transaction. Felux’s platform allows buyers and sellers to search SKUs, discover new opportunities, communicate in real-time, and send and receive payments. Felux also empowers customers to leverage data and analytics to drive better strategic decisions. In the future, we get excited about their ability to provide working capital, logistics, financing, and more as they become even more embedded into the workflow.
We are thrilled to announce that Expa is leading the $5.1m seed round along with 8VC and Lightbank.
Large, fragmented market
90% of the $300B of industrial metals purchased in North America today is transacted over email attachments or fax. Stakeholders in this ecosystem include steel mills, service centers, manufacturers that represent over 12,000 suppliers and 200,000 buyers. Felux aims to create one platform to make commerce better for all parties in industrial metals.
Deep knowledge of the steel industry with Silicon Valley tech DNA
When a new startup is disrupting a traditional industry like steel, it is rare to find a team with deep industry expertise and the “move fast and break things” mentality of the tech world. We saw this rare combination with the founding team of Dallas Hogensen, Todd Lebow, and Chris Day. Dallas led commercial and corporate sales at Lyft, where he grew Lyft Business from its inception to a billion dollar revenue unit. Together, Todd and Chris have over two decades of deep steel industry experience with strong relationships to really understand the needs of both buyers and sellers. While the team is distributed, many employees are based in Cleveland, OH (tied to steel roots), and Felux is excited about building a tech hub in the Midwest.
Explosive growth with over $90m in transactions over the last year
In the past 12 months, Felux has grown 900% and facilitated more than $90m in transactions. The platform now has over 1,500 customer locations ranging from Fortune 500 companies, steel mills, service centers, brokers and traders, and manufacturers located throughout the United States, Canada, and Mexico. And they’re just getting started!
The right time, the right model
With the volatility of steel prices in today’s market, the global industry is ripe for disruption now more than ever. Through Biden’s infrastructure bill increasing steel demand and COVID-19 supply chain constraints, buyers and sellers in this market need more efficient processes and data. We also believe Felux’s role as a tech-enabled marketplace providing transparency will be their moat over time.
Congratulations to Dallas, Todd, Chris and the Felux team - we can’t wait to join you on this journey to transform the future of steel! If you want to be a part of this journey, too, check them out here - they’re hiring!