Saltbox, a company providing co-working and warehousing space for up-and-coming e-commerce businesses, said it is working with Fundrise, a real estate investment firm, to expand nationally.
We covered Saltbox’s $10.6 million Series A round last year and spoke to CEO Tyler Scriven about the company’s first facility, a 27,000-square-foot location in Atlanta, opened in 2019, which was at capacity in a span of two months. That was followed by a bigger space in the Dallas-Fort Worth area.
Fundrise is putting $128 million of an equity investment into the effort, which is part of its larger strategy to invest in well-located, last-mile logistics industrial real estate.
As part of the investment, Fundrise will acquire warehouses ranging in size from 50,000 to 150,000 square feet that will house the new Saltbox locations. The first two locations will be in Alexandria, Virginia and Atlanta, which will give it two in that city. Saltbox also just recently added a location in Phoenix.
“One of the eloquent things about the partnership with Fundrise is their business model of democratizing access to real estate for retail investors,” Scriven said. “In our case, Saltbox is democratizing access to logistic infrastructure for small businesses, like retail customers, so we have a shared conceptual approach to the markets we are serving.”
The businesses using Saltbox’s facilities have $200 billion worth of e-commerce gross merchandise volume attributed to them, a figure he expects to be $500 billion in the next eight years.
Though those companies are given thousands of tools to help grow their business, like Shopify, Stripe and Facebook, the aspect of e-commerce logistics continues to be “hard and messy,” with most infrastructure not built for small businesses. As a result, most are stuck fulfilling orders from basements, garages and storage spaces when what they really need is a warehouse, Scriven said.
“We bring that together with an end-to-end solution, and at the crux of our strategy is human-centric logistics,” he added.
Meanwhile, Saltbox has six locations currently, with plans to have 15 by the end of this year.
Brandon Jenkins, COO of Fundrise, told TC that his company liked the approach Saltbox was taking to open up access to real estate. The company typically invests in residential apartments, but is also bullish on industrial.
“The real estate we are looking at is where there is a lot of growth and more activity,” Jenkins said. “Saltbox is doing industrial in an interesting way, mashing up asset classes and companies and coming at it from a new direction. This was a unique way we brought partnership together — it is usually not done in this way.”