Airhouse laid off staff and moved customers to partner 3PLs after a funding round failed

Supply Chain Dive reported on May 2, 2024 that fulfilment provider Airhouse had made a 'major layoff' and transferred customers to third-party logistics partners in April after a potential funding round fell through, CEO and co-founder Kevin Gibbon wrote on LinkedIn. The round collapsed at the last minute, and the reduced headcount meant the company could not support all its customers. It did not say how many staff were laid off.

Airhouse stopped sending orders to the 3PLs' warehouse systems on the Monday before the report, so customers would work directly with the 3PLs already serving them. Gibbon said customers got weeks of notice, that Airhouse pushed orders to the 3PLs without charging them to smooth the move, and that some were struggling anyway. Bask Suncare's CEO Mike Huffstetler said on X that the brand was left with hundreds of unfulfilled orders and scrambling to migrate. Gibbon said Bask was given specific dates; Huffstetler disputed that.

Airhouse had closed an $11 million round in March 2022 with Flexport and Easypost, after which Gibbon said revenue had quintupled and headcount doubled. A consultant who is a former Shyp executive told Supply Chain Dive that sitting as a middleman on a low-margin 3PL business, where good operators earn 10 to 15%, is nearly impossible.

A funding round that was about to close collapsed, and Airhouse had no other capital to carry its headcount.

Its model relied on partner 3PLs for warehousing, leaving it a middleman with thin margin potential, per the consultant quoted.

Venture and private equity funding was harder to come by in 2024, according to the report.

A middleman that sits on top of low-margin 3PLs depends on fresh capital to survive. When the round fails, its customers bear the transition.

Supply Chain Dive said the layoffs and transfers raised questions about Airhouse's future. Gibbon had launched Airhouse in 2020 after his earlier shipping company Shyp shut down in 2018.