Last mile provider FAST Group post-merger collapse: PE sponsor freezes fund amid financial red flags

In the fast-paced world of e-commerce logistics, mergers are often hailed as game-changers, promising synergies, expanded networks and economies of scale. But for FAST Group, the entity born from the August 2025 merger of the Australian package delivery company Sendle, the American FirstMile and ACI Logistix, the honeymoon was short-lived. Just months after the deal closed, Sydney-based Federation Asset Management (Federation AM), a key investor in the company, froze repayments on its $100 million Federation Alternatives Investment Fund II, citing a crisis at FAST Group that has exposed due diligence failures, financial discrepancies and the specter of bankruptcy.

The fallout underscores broader risks in the freight and logistics sector, where rapid consolidation driven by e-commerce demand can mask underlying operational and financial vulnerabilities. As cargo volumes fluctuate amid economic uncertainty and supply chain disruptions, this case serves as a warning to investors and operators alike.

The merger: a bold bet on e-commerce shipping

FAST Group was formed on August 7, 2025, through the strategic combination of three logistics players, each of which brings complementary strengths. Headquartered in California, the new holding company aimed to create a “dynamic ecosystem” for e-commerce shipping, serving everything from small businesses to enterprise customers in the US, Australia, Canada, India and the Philippines. The company was a leader in last-mile delivery services and partnered with companies like DoorDash to complete delivery.

• Sendle: Founded in Australia, Sendle specialized in delivering affordable, carbon-neutral packages for small e-commerce sellers. Backed by investors including Federation AM, Touch Ventures, Rampersand and King River Capital, it had raised more than $100 million in funding rounds since 2019, with annual revenue estimated at around $32.5 million before the merger.

• First Mile: A Salt Lake City-based company focused on shipping optimization in the mid-market, with national package pickup infrastructure and revenue estimated at about $75 million.

• ACI Logistix: The Long Beach, California, veteran of more than 60 years in national package logistics, automation and direct-to-consumer delivery reports revenue between $23.6 million and $100 million, according to sources.

The merger was positioned as a win-win: Sendle’s technology platform and international reach would be integrated with FirstMile’s pickup networks and ACI’s sorting facilities, offering customers expanded services without disrupting existing brands. Keith Somers, former CEO of ACI Logistix, has taken the helm as CEO of FAST Group, with a board of directors made up of the three entities. Federation AM, which had been a major shareholder in Sendle, moved its investment to a minority position in the new group and provided support to the company.

Collectively, FAST Group had an estimated 300 to 900 employees and $130 to $200 million in annual revenue, positioning it as a mid-tier player in a market dominated by giants like UPS, FedEx, and Amazon Logistics. But cracks were already forming beneath the optimism.

The crisis unfolds: due diligence gaps and financial shortcomings

The issue came to public light on December 12, 2025, when the AM Federation notified investors via email that it was suspending redemptions from its Fund II, a vehicle that targets annualized returns of 20% over five years. The fund, which held about 64% of its equity in FAST Group, cited “significant deficiencies” in ACI Logistix’s financial statements discovered after the merger. Questions were raised about the accuracy of information revealed during due diligence, prompting the Federation’s deals team to examine the acquisition process.

In the weeks following the merger, Federation injected $12 million in emergency operating capital into FAST Group to stabilize operations. Rapid leadership changes followed: The chief financial officer was replaced and a chief restructuring officer was appointed to oversee turnaround efforts. Despite these measures, the company has been struggling to raise up to $60 million in debt financing from hedge funds and distressed debt specialists. Sources indicate that potential lenders are considering acquisitions of existing debt at deep discounts (around 50 cents on the dollar), highlighting the perceived risk. Adding to the financial pressures, sources told FreightWaves that FAST owes DoorDash $20 million, potentially related to unpaid obligations from last-mile delivery partnerships.

The fund’s exposure was amplified by its mandate, which lacked limits on investment size in individual targets, allowing such a strong concentration on FAST Group. Zenith Investment Partners, which had given the fund a “recommended” rating, put it under review amid the turmoil.

As of January 10, 2026, no resolution has been announced. FAST Group faces the real possibility of filing for bankruptcy protection in the United States if the financing falls through, which could trigger legal battles over asset recovery. For Federation AM, which manages $23 billion in total assets, this represents a blow to its reputation, but not an existential threat. However, it draws attention to the company’s risk management in private equity-style investments in logistics technology.

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