While the supply chain is snarled globally, there are some things getting to market without difficulty: unicorns. That’s the tech industry term for startups reaching $1 billion valuations.
Dozens of supply chain technology companies are achieving unicorn status by raking in investments in the wake of the pandemic. These businesses employ data analytics to make sense of all the moving pieces in the global distribution system. Their services are in demand because they generate real-time information about products being moved from place to place. That work saves logistics customers time and money, especially during busy or chaotic times. Supply chain tech provides an extra jolt because adding efficiencies to the transportation of goods reduces emissions.
“In the last 5 years, supply chain technology investment has shot up 4x, from $6 billion to $24 billion,” Benjamin Gordon of Cambridge Capital wrote. “And in the last year, the number of supply chain unicorns more than doubled, from 25 to 51!”
Loadsmart, a freight marketplace, recently raised $200 million in financing, bringing its valuation to $1.3 billion. Logistics firms that topped $1 billion valuation last year include ShipBob, Stord Inc., and Flock Freight. ShipBob does fulfillment for e-commerce businesses. Stord does warehousing and distribution services. Flock Freight matches goods for delivery with trucks.
Ricardo Salgado, co-CEO of Loadsmart, told VentureBeat that many trucks run empty 20% to 30% of the time. “These are deep-rooted inefficiencies that exist in logistics because of barriers between shippers and carriers,” he said. “The key to unlocking efficiency in the supply chain … is leveraging technology to create solutions that remove these barriers, bringing carriers, shippers, and warehouses together so we can move freight in the most efficient, transparent, and automated way.”
Earlier this month, logistics firm Flexport announced that it brought in a $935 million round of financing, taking its valuation to $8 billion. The company said it will use the money “to accelerate development of its technology platform for global logistics and continue building an ecosystem that’s efficient, transparent, and inclusive – everything that logistics isn’t today.”
Project44, which tracks shipments globally for major corporations, said last month it raised $420 million, bringing its valuation to $2.2 billion. The company tracks more than 1 billion packages annually and 96% of all shipping containers globally every day. The firm says it provides the “connective tissue” between transportation providers, third-party logistics companies, and shippers.
“Our customers can go from being reactive to proactive,” Project44 CEO Jett McCandless told Bloomberg. “Sellers have a better sense of knowing whether they’ll meet a commitment with a retailer or end customer, and buyers can make plans based on whether shipments will be on time, early, or late.”
Companies with goods or components to ship are desperate for more information about deliveries, especially if the data arrives in time to be used to speed deliveries or avoid snafus. Adam Compain, senior vice president at Project44, told Freightwaves.com that shippers don’t even get notification that their freight has arrived at a port until 36 hours later, while 10% of the time they’re never told. Every minute of mystery adds to delays and costs.
Compain said Project44 uses satellite data, detailed port maps, and other information to give customers updates within five hours of arrival. “And we fill in the 10% gap of shippers who are never notified with data that doesn’t exist anywhere else, but that we generate.”
For supply chain tech, the money is rolling in to help the freight that’s rolling out.
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