The shakeup at the fulfillment provider
happened after a potential funding round fell through, CEO Kevin Gibbon
announced. Fulfillment provider Airhouse 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 announced in a LinkedIn
post Wednesday.
The company was on
the brink of closing the round before it collapsed at the last minute,
instituting the layoff on April 12, Gibbon said. The number of people Airhouse laid off
wasn’t specified, but the reduced headcount meant the company couldn’t support
all of its customers.
Airhouse relies on partner 3PLs for
warehousing goods, and it decided to transfer its customers to work directly
with the 3PLs that had been serving their businesses. Airhouse stopped sending over orders to the 3PLs’ warehouse management
systems on Monday 29 April.
Gibbon said the company gave affected
customers weeks of notice that this was happening, although he added that some are having trouble with the
transition. “We continued to push orders to the 3PL without charging them
for anything to make the transition as smooth as possible,” Gibbon said.
“However, given how much Airhouse does in the background, we knew this was not
going to be a smooth transition but we unfortunately had no other choice.”
Airhouse customer Bask Suncare was “left
with hundreds of unfulfilled orders, completely scrambling to migrate to a new
fulfillment partner” as a result of the changes, founder and CEO Mike
Huffstetler said on X Tuesday. Gibbon responded that Airhouse gave Huffstetler
specific dates Bask Suncare would need to make the transition by, which
Huffstetler disputed.
Gibbon helped launch Airhouse in 2020
after his shipping company Shyp shut down in 2018. Airhouse has positioned
itself as a fulfillment platform to help brands with e-commerce operations and
logistics, and it saw promising growth in its early days. In March 2022,
Airhouse closed an $11 million funding round that included strategic investors
Flexport and Easypost. Gibbon said in a blog post about the round that the company had “quintupled revenue” and
doubled its headcount.