附近上门

The COVID-19 pandemic has moved supply chain and logistics technologies to the public eye like few times before, as shortages at grocery stores and the distribution of a possible vaccine highlight the importance of moving goods and essentials.

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However, just as the industry has taken on added importance, investment funding seems to have hit a low ebb.

So far through 2020, investment dollars in supply chain tech have lagged behind previous years, according to 附近上门 data. In 2018, global supply chain investment exploded, hitting $21.8 billion, up from $5.6 billion in 2017, then dipped to $15.6 billion in 2019.

Thus far this year, the sector has seen only $11.4 billion invested. In addition, one of the six $1.5 billion-plus investment rounds that occurred this year was when Chinese truck-hailing firm raised $1.7 billion from investors that included and just last month.

Falling dollars

Others in logistics and supply chain tech such as , a Singaporean company with holdings in many different sectors, and also have been able to secure investments of more than $1 billion this year, but those deals aside, money has not rolled into startups in the sector this year as in the past.

That could be due to the lack of results, said , founder and CEO of logistics provider .

鈥淭here really has not been a lot of winners yet,鈥� said Zaslansky, whose company recently secured $113.5 million in a round led by Softbank. 鈥淣ot a ton have excelled.鈥�

Zaslansky estimates only about half of top-tier venture capital firms have made bets in the space, as many startups have struggled to produce significant revenue numbers and margins for their investors.

鈥淚t is a space not well understood by VCs,鈥� said , CEO and president of Milpitas, California-based , a platform developer for supply chain visibility in pharmaceuticals and other industries.

COVID-19 impacts

However, the current pandemic only brought more attention to a sector that already has been transforming itself over the last several years due to floods, fires and trade wars鈥攑utting a focus on visibility into the supply chain instead of optimization and price.

The pandemic has only accelerated that change and put the entire sector under a hotter spotlight.

鈥淭here鈥檚 no doubt about its impact,鈥� said founder and CEO , whose company offers freight forwarding services tightly integrated with a supply chain visibility platform.

Petersen founded Flexport in 2014. The San Francisco-based company raised a $1 billion Series D last year at a $3.2 billion valuation, and interest in the industry has steadily increased, he said.

Petersen said COVID-19 certainly has made more people take note of the supply chain sector, especially with weekly U.S. imports up 10 percent to 15 percent year-over-year and dramatic shifts in overall consumer buying.

It also has illustrated how difficult logistics can be when a variable鈥攍ike a pandemic鈥攅nters into the equation.

鈥淭here was a 10 times to 20 times increase in PPE (personal protection equipment),鈥� said Petersen. 鈥淭hat kind of increase doesn鈥檛 just happen overnight in the industry. You see how hard it can be to scale.鈥�

Moving things ahead

Investment in supply chain tech could well pick up as logistics will remain in the public鈥檚 eye鈥攁nd under pressure鈥攚ith the introduction of new COVID-19 vaccines.

Veerina estimated that vaccine shipping alone should increase in the U.S. 4 times to 5 times due to the expected COVID-19 vaccines.

The good news may be that the drug supply chain was digitized recently when laws were enacted in the U.S. in 2015 to cut down on counterfeit drugs, said CEO , whose company helps with tracking and compliance in the pharmaceutical and health care industry.

That digitization has brought more visibility into the movement of drugs and other goods, said , lead investor at the firm and a member of the board of directors at TraceLink. The industry as a whole has shifted from optimization to visibility over the years, and that shift eventually will lead to the next phase in the industry of gaining actual insights from that visibility, he added.

Interest high

That digitization and visibility could lead the next wave of investment, is something many see as happening in only a matter of time.

鈥淭he market is very active right now,鈥� said Veerina, adding that he has been contacted by a dozen private equity firms this year looking to offer growth funding. 鈥淚鈥檝e never seen so much inbound interest.鈥�

While autonomous vehicles and drones may be a bit further into the future for the logistics sector, technologies around improving the connectivity layer that helps keep the supply chain together, as well as artificial intelligence and machine learning, all should continue to see investment, Petersen said. Others pointed to increased spend on IoT technologies like sensors and 5G.

There were examples of that increased interest just last month when acquired Ann Arbor, Michigan-based , an AI-enhanced supply chain design and planning software developer, for about $1.5 billion. Private equity firm also announced last month鈥檚 close of the new $900 million THL Automation Fund, which will back automation companies in sectors including logistics.

New players in the market

The changing landscape of the supply chain and new technologies could entice strategics from outside the more traditional logistics space to eye the sector for investment or dealmaking, both investors and executives said.

Large enterprise resource planning companies such as and could view the supply chain as a natural expansion of their platforms, Petersen said.

Cloud providers like and also could be interested in the sector as more supply chain data flows through and is dependent on their infrastructure, Veerina said.

More traditional logistic giants, and , also have shown continued interest in advancing tech in the sector. DHL has invested in a handful of startups, while late last year C.H. Robinson announced it would invest $1 billion in technology over the next five years.

鈥淭here is no doubt COVID accelerated innovation out of necessity,鈥� said Tim Gagnon, head of Robinson Labs at C.H. Robinson. 鈥淚t would be surprising to me if we don’t continue that acceleration.鈥�

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