Darkstore, a technology-driven fulfillment solution for companies like Nike and others, has raised a $7.5 million Series A round. With the additional funding in hand, Darkstore plans to expand its fulfillment center into more categories.
Currently, Darkstore fulfills products for brands in the areas of footwear, home and consumer electronics. With the funding, Darkstore will expand into lifestyle, health and beauty, and athletic leisure, Darkstore founder and CEO Lee Hnetinka told TechCrunch over the phone.
“There are other categories where we get inbound and turn it town,” Hnetinka said. Down the road, Hnetinka said he envisions additional categories, including groceries and perishables.
Darkstore works by exploiting excess capacity in storage facilities, malls and bodegas and enables them to be fulfillment centers with just a smartphone. The idea is that brands without local inventory can store it in a Darkstore and then ship out same-day. Darkstore doesn’t charge brands anything to store inventory but charges 3 percent for every item that Darkstore ships, with a minimum of $2 and a maximum of $20.
“Up until now, Darkstore has really been behind the scenes,” Hnetinka said. “We want to continue to do that and to be a superpower to our brands. Our mission is to enable the brands to be direct to consumer and we believe we can help them do that even better by creating what we call a branded movement.”
Specifically, Darkstore envisions creating a badge for brands to place on their websites to signal that it offers same-day delivery via Darkstore. Brands currently see Darkstore as a competitive advantage, Hnetinka said, so they’re unwilling to promote its use of Darkstore, but he hopes to change that. That change would ideally help brands to increase trust with its customers, while also undoubtedly providing more visibility and therefore more business for Darkstore.
Also on the docket for 2019 is to explore a new giving initiative. Tentatively called Darkstore Giving, the idea is to make it easier for brands to reduce return-driven waste. Instead of throwing away lightly used items, Darkstore could facilitate the donation of those items to non-profit organizations.
Darkstore first launched in 2016, counting mattress startup Tuft & Needle as one of its first customers. To date, Darkstore has raised almost $10 million in funding.