The spread of the Covid-19 pandemic has caused an external shock to the global economy and interrupted the supply chain in nearly every industry.
The pandemic is a power boost for digitalization of supply chain management tools and accelerates trends that were already forming the future of a market. Supply chains are the backbone of the global economy, which so far was mainly fueled by globalization and international trade. Covid-19 has shown, the real need for flexibility and resilience in supply chains & that (besides being cost-efficient) the supply chains of the future need to be transparent and robust but flexible at the same time to cope with adverse events like a global virus.
I wanted to take a deeper look at relevant players in the European market and the future of supply chains post-pandemic.
The European Supply Chain Management Tech Stack
Below you can find an industry map of 250+ companies in Europe focusing on the different aspects of Supply Chain Management founded between 2008 and 2020 mapped into eight categories*. I chose a broad view and tried to cover a wide definition of supply management. Therefore, the map includes process and planning tools, analytics, sourcing, production and storage as well as distribution.
*Disclaimer:
1) Many startups listed might sit across more than one category – I chose one for each for simplicity
2) Countries considered: Germany, France, Austria, Switzerland, Italy, Spain, Portugal, Belgium, Netherlands, Belgium, Luxembourg, Denmark, Sweden, Norway, Finland, Ireland.
Sourcing and Procurement
Companies included:
Primarily the segment includes all companies focused on digitalizing the process of finding and managing suppliers. This includes the procurement of goods and services (no matter from which specific industry). In some case, the differentiation between software and marketplaces might be debatable. However, as long as there is a process management component to it, the companies were mapped into this segment.
# of companies: 36
$ total funding of segment (in USD): > 117 Mio. USD
Top 3 companies based on funding:
Key Insights:
- Companies in this segment not only want to digitalize the process of procurement and sourcing of goods and services. In addtion, they aim at guiding companies through an ever-increasing complexity of global offerings by providing an algorithm based analytical selection process
- Involvement and management of (more) internal and external stakeholders is becoming equally important. From defining specifications and requirements through streamlining the procurement process through supplier relation management, every step is going digital and showing more and more similarities to project management software offerings.
Supply Chain Visibility
Companies included:
Understanding the characteristics of resilience supply chain and tracking the flow of goods, services, and documents through the chain is a necessary first step to optimize your business processes. Whether it is real-time information about your shipment, supplier monitoring, or even checking for fraud in delivered products, all companies that provide services helping to increase transparency are included in this segment.
# of companies: 33
$ total funding of segment (in USD): > 259 Mio. USD
Top 3 companies based on funding:
1. NexxIoT
2. Ambrosus
3. Shippeo
Key Insights:
- Supply chains are monitored very closely and getting more and more transparent as supplier networks are getting mapped by software and equipment is becoming more connected and transparent
- Orchestrating IoT-equipment, smart sensors, and software is a key component to this segment and has attracted the most funding. 5G networks (once broadly available) will be another boost for this segment and might fuel adoption of Industry 4.0 applications
- Monitoring, evaluating, and mitigating supplier risks will create more resilient supply chains and enable companies and logistic providers to react in nearly real-time, leading toward more robust but flexible and resilient supply chains.
Freight Forwarding / Shipping / Fleet Management
Companies included:
The segment is by far the biggest in the industry. Companies in this segment are digitizing the freight forwarding and shipping business predominantly by providing platforms on which businesses can plan, arrange and book their shipments. Marketplace business models are dominating the space, connecting senders and carriers across all categories of goods. I also included Fleet Management companies here, since they mostly address transportation service providers managing their fleets operations including contracting with shippers in a digital way.
# of companies: 58
$ total funding of segment (in USD): > 460 Mio. USD
Top 3 companies based on funding:
1. Sennder (+Everroad)
2. Forto (aka Freighthub)
3. Xeneta
Key Insights:
- The core of logistics is going digital and startups like Sennder/Everroad and Forto are challenging the established logistic companies. As digitally native companies they can easily expand their service offerings by integrating other services from the supply chain management space and understanding the need for flexibility and resilience in supply chains.
- Scaling the business efficiently to reach critical mass is decisive in the logistics business with its thin margins. This might increase the pressure to merge with competitors or other partners, e.g. merger between Sennder and Everroad
- From parcels to full load trucks and even ship chartering; while the core process of moving goods inevitable stays offline (until Scotty can beam them up), every process around is digitalized and trending to become automated wherever possible
- Autonomous trucks or platooning are starting points to fundamentally change also the coordination and steering of the vehicles itself
Process & Planning
Companies included:
Most probably this is the most diverse segment, as it includes a wider range of software startups addressing the need for planning, analyzing or improving processes around the supply chain. But what is the importance of supply chain resilience? From planning demand and supply over route-optimization to transportation management systems anything goes into this bucket. It might be debatable wether Celonis is well suited here. However, I still included them, since they also address a number of issues associated to supply chain management.
# of companies: 17
$ total funding of segment (in USD): > 380 Mio. USD
Top 3 companies based on funding:
1. Celonis
2. Supply Stack
3. Kardinal.ai
Key Insights:
- Celonis is the most relevant company to be named in this segment, since it accounts for more than 360 Mio. USD in funding
- Companies from that segment are mainly focused on automating tasks and processes such as route planning or order management
- Products in that segment are less-complex alternatives to classical TMS/ERP systems or add-ons to extend existing TMS/ERPs functionalities
Asset Tagging & Sensors
Companies included:
A number of companies in the map sit across over more than one category. Whether a company is focused on localization or monitoring of physical assets through sensors or the software managing the tagged assets (which would also fit the supply chain visibility bucket) is sometimes a judgement call. I tried to put companies concentrated on the identification and tracking through sensors in this category.
# of companies: 23
$ total funding of segment (in USD): > 24 Mio. USD
Top 3 companies based on funding:
1. WTS Positioning Solutions
2. Logmore
3. WITRAC
Key Insights:
- Investors really don´t like hardware-focused startups (surprise)
- Sensors are a key component and are still becoming smarter and more powerful enabling realtime-monitoring of countless parameters
- Sensors, Analytics, IoT and Industry 4.0 are interlinked and applications of sensors go far beyond of supply chain management
E-Commerce Logistics
Companies included:
Products and companies with fulfillment service businesses are summarized in this segment. Sometime the line towards a freight or shipment marketplace might be blurred. Nevertheless, I tried my best to put companies addressing e-commerce or dropshipping companies with a (more or less) complete fulfillment-solution in here.
# of companies: 22
$ total funding of segment (in USD): > 46 Mio. USD
Top 3 companies based on funding:
Key Insights:
- Given the dominance of big players like amazon, eBay or other more established partners the segment did not attract much investment
- E-Commerce is still growing and marketplaces might fuel a next wave in the segment
Warehousing & Production
Companies included:
This segment is dedicated towards intralogistics of production sites as well as storing and then distributing your products within your warehouse or anywhere close to your customers. I included companies helping to manage the flow of goods and information within the production process itself. As in the other segments it includes companies with products that have applications in a number of industries beyond production and warehousing. However, all companies in that segment can help to digitize, streamline and improve production and warehousing operations.
# of companies: 36
$ total funding of segment (in USD): > 240 Mio. USD
Top 3 companies based on funding:
1. Scandit
2. ProGlove
3. Magazino
Key Insights:
- Acceleration and automation of repeating tasks is the main topic in that segment
- Robotics and machine learning are heavily influencing the products and solutions especially in the subsegment of production. Consequently, it is attracting a major portion of the investment here
- Offline storage solutions allowing to place your products where they might be needed soon (your AI will tell you) might be an emerging trend. As a result, there will be increasing demand for same-day deliveries
City Logistics
Companies included:
Here you can find all kind of businesses tackling the problem of first mile / last mile or on demand delivery. Solutions range from a local courier network to stationary locker systems to innovative (and green) delivery vehicles. I tried to only include companies with at least a B2B component in it, leaving out pure food delivery services like Lieferando.
# of companies: 33
$ total funding of segment (in USD): > 700 Mio. USD
Top 3 companies based on funding:
Key Insights:
- First/last mile deliveries are a tough business with thin margins that need a critical mass to reach profitability
- The segment also sees a lot of hardware companies installing physical storages/lockers as well as new vehicle types (including robots and drones) for short-distance transportation such as cargo bikes or small trailers
- Micro-Hubs in combination with cargobikes or even self-driving delivery robots and self-service locker boxes might offer a serious alternative to roads blocked by delivery vans.
Understanding the need for flexibility and resilience in supply chains help make your business processes hassle free.
Methodology
The map includes companies and data sourced from Crunchbase, AngelList and other public sources based on a keyword search including relevant keywords from the area of supply chain management. I included companies founded in 2008 or later, which are still active, privately owned and classified as for-profit businesses.
About me
I spent the last seven years in the start-up / vc-ecosystem covering different roles both at an early stage startup and being a venture capitalist. I started my career studying economics with a specialization in transport and logistics, which since then has been a topic of interest for me. At seed & speed ventures I can follow my passion for supporting early-stage companies in building and growing their businesses.
In 2021 I also kicked of my project to build the supply chain management startup handbook 2021. Startups touching any of the segments associated with supply chain management are invited to secure their spot in the handbook by registering here.
Disclaimer
seed + speed Ventures is an investor in LuckaBoxx and PreWave.
