Custom manufacturing should be as scalable as the web

· 3 minute read

Three years ago we launched Lumi to help e-commerce companies produce custom packaging. Today, Jesse Genet and I are thrilled to announce we’ve raised a $9M Series A.

In 2017, tens of millions of packaging items were produced using the Lumi platform. If you bought something on the internet recently, chances are high that it came in box or an envelope made with Lumi.

Online brands use Lumi packaging to ship everything from clothing to food, books, electronics, games, mattresses, cosmetics and medicine.

Many of our customers bring a new perspective to how business can be reinvented for the 21st century. They’re making commerce more inclusive, more sustainable, more accessible, more personal. They are challenging the status quo and are enabled by the internet to flourish more freely than ever before. We think Lumi can break down a few of the logistical barriers that still stand in their way.

Historically, the packaging supply chain was designed for companies that developed slowly and regionally, but today businesses are able to develop rapidly and globally. In the past three years, we’ve helped companies grow from branding their packaging with a simple rubber stamp, to producing hundreds of truckloads of printed boxes. We’re designing that flexibility into Lumi because your supply chain should be as scalable as your online store.

Eighteen months ago I wrote about online brands (aka DNVBs) and how their supply chain will evolve:

DNVBs sell physical things, atoms. But when it comes to making and moving them, DNVBs want these physical things to behave more digitally, like bits. They want their physical infrastructure to scale as easily as their AWS-powered site.

The magic behind Lumi is networked manufacturing, i.e. bringing factories online. Instead of managing communications with individual suppliers for each item, the Lumi Dashboard centralizes this process. Each item is abstracted into specifications and the best factory for each job is picked based on criteria for cost, quality and lead time. Our extensive network of factories allows us to locate manufacturing within 50 miles of almost any distribution center in the United States. If fulfillment moves to a different part of the country, production can be quickly re-located near the new distribution center.

As we learn a company’s usage patterns, individual optimizations can be made to improve sustainability, reliability and costs. As the entire system gets more efficient, major reductions in waste and carbon emissions can be achieved.

We’re often asked if our customers eventually outgrow Lumi — some might! But conceptually, we don’t see a limitation. Take the example of Netflix, which accounts for over a third of internet traffic in the US. In an excellent blog post, Netflix explained the four reasons why they rely on Amazon Web Services to host and stream their content. These closely match the reasons even big brands are switching to Lumi:

  1. We needed to re-architect, which allowed us to question everything, including whether to keep building out our own data center solution.
  2. Letting Amazon focus on data center infrastructure allows our engineers to focus on building and improving our business.
  3. We’re not very good at predicting customer growth or device engagement.
  4. We think cloud computing is the future.

Since publishing this article in 2010, Netflix has experimented with its own data centers but consistently returned to AWS for these reasons. Rolling your own hosting, much like building your own payment processor, checkout or email delivery system, is not only unnecessary, it has become less cost-effective and potentially detrimental compared to using a dedicated service — even at large scale.

Up until now, this level of flexibility was only available in the digital world. But the same challenges hold true for manufacturing and logistics. Lumi is all about proving that those constraints can be lifted in the physical world. That’s the idea we’re building upon every day.

To help accomplish this goal we set out to find people who could finance the next phase of Lumi. At the very top of that list were two names: Spark Capital and Forerunner Ventures. We couldn’t be more excited that they agreed. Kevin Thau of Spark led our $9M Series A, with Kirsten Green of Forerunner Ventures, and Satya Patel continued Homebrew’s amazing support.