In a prior Supply Chain Matters blog, we unveiled the Ferrari Consulting and Research Group’s 2021 Predictions for Industry and Global Supply Chains.
Of our slate of predictions for the coming year, 2021 Prediction Eight anticipates added investment, M&A and key strategic partnership activities among certain sectors of the supply chain technology landscape.
Much of this investment and activity is going to be fueled by the increased need for supply chain digital transformation and more real-time visibility in inventory and material movements which are also addressed in our predictions. It will further involve inter-enterprise Cloud based B2B supply chain platforms that support the synchronization of connected planning and customer fulfillment execution processes as well as analyze, synthesize and simulate differentiating decision-making capabilities.
This year, there has already been ample evidence of such activity. Here are some examples.
Supply Chain Execution
In October, supply chain Cloud platform technology provider E2open announced that it has entered into a business combination agreement with CC Neuberger Principal Holdings 1, a publicly traded special purpose acquisition company to in-essence become listed as a public company on the New York Stock Exchange. The total equity investment raised was reported as $1.1 billion and will be utilized to pay down existing debt, purchase a portion of the equity owned by existing E2open investors and conservatively capitalize the company’s balance sheet. Essentially this provider came full circle in transforming itself back to a public company after having gone private via an investment transaction with Insight Venture Partners in early 2015. The company’s valuation was pegged at $2.57 billion.
This week, E2open made a subsequent announcement of an additional $175 million: “led by a very reputable and highly-concentrated long-only investor.” This has upped total equity investment to upwards of $1.3 billion raised.
Our bi-weekly This Week in Supply Chain Tech news capsule series has featured a lot of additional new investment and active partnership announcements focused on the digital supply chain capabilities in logistics, transportation and online customer fulfillment dimensions.
Transportation and logistics real-time visibility platform provider Project44 reported this week that the company has completed a $100 million Series D financing round, bringing total investment raised to $241 million. The latest round was led by private equity firm Insight Venture Partners. This new funding reportedly will be utilized to support continued global expansion of this provider’s carrier network technology, along with added innovations and partnership both up and downstream of transportation. The Project44 platform is currently connected to over 175,000 global carriers among various modes of transportation.
Among Insight Partners other equity investments have been E2open, Shopify, CommerceHub and procuri, among others.
Digital freight-booking services provider Loadsmart closed a reported $90 million Series C funding round led by BlackRock’s Innovation Capital group. Other investors included TFI International and global container shipping giant A.P. Moeller-Maersk. The latter firm, the global leader in ocean container shipping, participated in previous Loadsmart funding rounds and is a reported user of the company’s services. The company has reportedly raised over $146 million since its founding in 2014 and expects to turn profitable by 2023.
Supply Chain Response, Planning, Analytics and Simulation
One of the most noteworthy developments in this area was business spend management technology provider Coupa Software announced acquisition of supply chain design and analytics technology provider Llamasoft for a reported purchase price of approximately $1.5 billion. The acquisition is aimed to strengthen Coupa’s capabilities in direct procurement spend management and among broader supply chain business process support capabilities in the area of procurement, supply network design, simulation and artificial intelligence enabled decision-making. The stated goal communicated by Coupa executives is to drive additional direct spend through the company’s platform, which, in-turn yields additional supply chain management focused data and insights.
Llamasoft had previously completed a key acquisition and partnership of its own. In October of 2019 it acquired Opex Analytics LLC, a Chicago based provider of artificial intelligence-based applications for Fortune 500 companies. In August of that year, the technology provider announced a strategic partnership with China based JD Logistics, which is the logistics business arm of China’s online retail platform JD.com. That announcement noted that JD Logistics would exclusively deliver and integrate LLamasoft’s software applications as part of its existing service and technology offerings to select manufacturers, retailers and logistics providers in China.
The above examples by themselves amount to upwards of $3.1 billion of investment in supply chain management focused technology, not including the many other smaller examples that have occurred to date.
The notions of “follow the money” both in actual individual investments and in the specific equity firms or Cloud technology platform providers centered on Edge, Core, Connected Factory and inter-enterprise supply chain digital network process areas, have led us to predict that supply chain management and their respective IT support teams should expect that more of such developments will occur in the coming year.
A further catalyst is this week’s groundbreaking announced ruling from the Securities and Exchange Commission (SEC) approving a New York Stock Exchange plan to allow for direct initial public offering (IPO) of stock without having to pay expensive underwriting fees. This announcement is being billed as the ability of rapidly growing companies, including tech providers, to sell shares directly on the exchange to raise additional capital or provide exit strategies for existing founding or equity investors.
As Bloomberg noted in its reporting of this announcement, both critics and backers agree that direct listings could well become much more popular and provide a game-changing opportunity for capital markets as well as perceived hot companies.
In our published annual predictions report to be published in early January, further perspectives will be provided on what to expect in the supply chain technology market.
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