Passport, a customer service company focused on shipping, has raised $3 million in seed funding from some notable names

Founders building a brand today are largely relying on new infrastructure to do it, though theyre still heavily reliant on legacy carriers like FedEx and DHL when it comes to international shipping. In fact, prohibitively high prices, along with not a lot of support or tools, are a few reasons why more American products arent shipped abroad. Many startups especially decide its simply not worth it.
Enter Passport, a 1.5-year-old, San Francisco-based startup that sees an opportunity to make it easier for brands to reach far-flung customers and that has raised $3 million in seed funding toward that end. Among its backers is Resolute Ventures; Precursor Ventures; Product Hunt cofounder Ryan Hoover; Girlboss founder Sophia Amoruso; and April Underwood, the chief product officer of Slack.
What piqued investors interest? The team, for starters, including cofounder and COO Aaron Schwartz, who previously founded his own e-commerce company (Modify Watches) and CEO Alex Yancher, who, among other things, cofounded a smart fridgekiosk companycalled Pantry that was acquired. The two have some experience in moving packages from one point to another; they also know the pain of dealing with lost and delayed packages.
The company is also asset light, which investors typically like. Indeed, the company is largely a customer service business focused on shipping globally. How it works: one of its customers lets take Native Deodorants will hold its inventory in a third party logistics warehouse. In Natives case, its a Connecticut company called Fulfillment Works, and Fulfillment Works slaps a label on Natives packages that have been created by Passport, then gets thepackages ready for pickup.
After that, Passport arranges for a daily pickup of all of Natives internationally bound parcels, working through a third-party freight company like Old Dominion or FedEx Freight. That company brings the parcels to a consolidation point, where the parcels are sorted by country and final mile. After that, the Canada parcels, say, are sent on a truck to the border and perhaps injected into the Canadian Postal system, or theyre flown to Australia on a Qantas flight and shipped out to the recipient via the Australian Post. Passport then acts as a reference point so that if a customer has any questions about his or her package, they are fielded by Passport.
It doesnt sound like rocket science. All the same, in an age where consumer expectations are higher than ever when it comes to at-home delivery, an aggregator that connects all the pieces to provide a better customer experience may well prove worth it to some brands. Indeed, in addition to Native, others of Passports early customers include the mens outfitter Shinesty, the backpack maker ISM, the socks manufacturer Bombas, and the clothing companyBetabrand.
We were in touch yesterday with Yancher and Schwartz to learn more.
TC: How did you identify this particular sliver of industry as a problem worth tackling?
AY: I ran a personal shopping service that helped people abroad buy products from the U.S., and I saw that demand for American goods is booming abroad. In fact, half of a brands Instagram followers are from abroad, but only 10 percent of its sales are. Despite the boom in cross-border, current international shipping options are lacking a lot of what a merchant needs to successfully sell and ship abroad.
This pain doesnt just exist for individual brands alone but also for third party logistics facilities the operations companies that partner with brands and that receive, warehouse and fulfill customer orders. They have incredible buying power for shipping customers, and yet theyre also unsatisfied.
TC: It sounds like your differentiator is customer service, but couldnt another startup come in and strike relationships with international carriers and do precisely the same thing?
AY: Shipping a package internationally is complicated. Building a consistent experience across hundreds of partners with different transit times expectations, technical backends and terms and conditions requires technological as well as logistical expertise. Ivespent years stringing together custom shipping routes. This isnt something you just jump into, theres a ton of nuance into how you work with global posts and private carriers.
What we do differently is embed customer support via Intercom on the tracking page, which is where consumer anxiety happens. Anyone can offer customer experience, but for international shipping, its pretty darn hard. You have to get detailed data from a bunch of carriers. You also have to know what the exceptions are. We automate a lot of the support behind the scenes, which has taken a year to get going.
We also offer proactive notifications when door tags are left, so a customer can follow-up directly with their local carrier and packages arent set back to the U.S.; we set up direct Slack channelswith brands in order to help their own customer experience teams deal with any other questions about international shipping; and we do in-shopping-cart integrations, like a fully landed cost calculator, so consumers know exactly what they are paying for an item and wont get hit with a your item is held at customs.
TC: Which international carriers are you working with, and do you have any kind of exclusive deals with them?
AS: We ship to 195 countries around the world and use a different last mile provider in each country and use a variety of trucks (to Canada and Mexico) and air transport partners to get parcels all over the world. In total we work with over 300 carriers and posts. We dont have exclusive deals on the carrier side of the business.
TC: How do you price packages? How much more do you mark them up in exchange for the hand-holding you provide?
AS: Our price depends on multiple factors from the origin point to the quantity of shipments. Our markup range is between 5 percent to 50 percent depending on the client, but our pricing is 100 percent transparent. If you ship with DHL, FedEx, etc. youll get a rate sheet. But then youll also have a bunch of hidden fees like fuel surcharges, or remote area surcharges of up to 30 percent that will be sent 30 days later, after youve charged your customer. Theyll charge you extra for certain deliveries. Theyll charge you extra for the fully-landed cost calculator or tell you to partner with a different party. And if your package is lost, theyll say, Fill out this form. Well be in touch in 90 days after an investigation.
Our point of view is that great logistics is necessary but insufficient when it comes to international shipping. You also need to deliver a great digital experience for brands. Everything that goes into delivering that gets bundled into our postage price.
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