In this dedicated edition of our Supply Chain Matters This Week in Supply Chain Tech series, we highlight another announced equity infusion for supply chain execution visibility platform provider project44.
Despite an environment of a much more conservative private equity investment climate, end-to-end supply chain execution platform provider project44 announced today that the company has raised an additional $80 million funding round.
This latest round is unique from three perspectives.
It was led by London based sustainability investment firm Generation Investment Management, along with the investment arms of two ocean container shipping lines. That includes Denmark based A.P. Moeller Holding, the privately held investment company affiliated with Maersk Line, and France based CMA CGM, now a global carrier in sea, land, air and logistics services. Previous investors Goldman Sachs Asset Management, TPG, Emergence Capital, Chicago Ventures, Sapphire, 8VC, Sozo Ventures and Omidyar Technology Ventures reportedly also participated in this latest round.
Upon speaking with Jason Duboe, Chief Growth Officer at project44, we ascertained that the added participation of two global ocean carriers was significant, both in adding the dimension of global shipping to the project44 platform, and in improving actionable reporting and data gathering directed at measuring and mitigating Scope 3 emissions footprints among multiple modes of global transportation.
Global shipping reportedly accounts for 4 percent of global greenhouse emissions (GHG) and both the United Nations agency tasked with regulating global shipping, the International Maritime Organization (IMO) along with the European Union, have been working on new regulations pertaining to ships to measure a carbon consumption index and annual efficiency ratio (AER). The IMO will be mandating a two percent annual improvement in AER for the period spanning 2023 thru 2030. According to Duboe, the investment will assist the Cloud platform provider in facilitating an open platform for the tracking and measurement of Scope 3 emissions in global transportation and logistics.
The second perspective was that of valuation and what is described as a “glide path to profitability.” This obviously is the response to the current more conservative private equity investing environment that now places more emphasis on self-sustaining profitability and cash flow.
This latest round values this tech provider at $2.7 billion, an increase of 12 percent from the Series F investment round highlighted by this column in early January of this year. Today’s announcement indicates that thus far this year, this platform provider has booked $46 million in annual recurring revenues (ARR), bringing total booked ARR to $135 million. Last year, ARR was reported as $100 million. Further outlined is that over 220,000 intermodal and LTL carriers have agreed to the company’s terms and conditions for the sharing of data on behalf of project44’s customers.
In our interview, Duboe acknowledged that the investment bar is higher for world class companies, and that multiple investment rounds along with an eventual IPO represent a series of financing events for self- sustaining a company from a financing and revenue growth perspective.
If readers have been following these multiple investment events, this latest round results in over $920 million in equity investment in this provider’s capabilities to date. That remains unparalleled in the supply chain execution and logistics segment of the market.
The third perspective was one we identified with our prior supply chain tech focused posting related to project44’s newly announced Movement capability. It equates to the ability of multiple Cloud based transportation, logistics services, warehousing and supply chain risk mitigation tech providers to come together in two-way collaborative information to eliminate the need for time consuming and expensive point-to-point integration efforts. The usual stumbling block has been monetization of information, especially for originators of that information. The temptation for recurring revenue loom large for all participating partners.
For project44, it equates to being one of the co-founders of the Open Visibility Network, in conjunction with Tive and Four Kites, among other tech providers.
In our interview, Duboe generally concurred that open sharing of information was essential, but in the end, various businesses and services providers will determine what the baselines of essential equate to. He outlined the goal as the ability to track and context either “inventory at rest” and “inventory in motion” as key to information transparency.
We continue to advise multi-industry supply chain technology selection teams to evaluate their needs for more in-depth intermodal logistics and transportation visibility in the context of building the foundational elements of streaming data lakes feeding an overriding logistics control, monitoring and decision-making capability.
Rather than technology, the biggest challenge in the logistics sector remains the alignment of stakeholder interests. With this latest equity infusion, project44 is adding the objective of Scope 3 sustainability information visibility and reporting as a candidate for global-wide visibility need.
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