In my years of observation and insights related to supply chain focused software and technology, I am often asked the question of how attractive certain supply chain and cloud-based B2B platform technology has become for venture funding. After all, venture-backed funding has a track record for spawning leading-edge supply chain focused technology.
If you have been keeping-up with Supply Chain Matters postings, you would have sensed that supply chain technology has again become attractive and has garnered a new wave of venture capital funding in new start-ups. The question was: how attractive?
The executive team of start-up cloud-based supply chain network provider Elementum provided this author a web link to a posting published on the CB Insights Blog, a site that quantifies and tracks venture capital investments. The posting titled: Software Eats the Supply Chain provides succinct quantification of the renewed venture capital interest in supply chain focused technology. The posting quantifies that over the last four quarters, investors poured $359M into 63 deals in the logistics & supply chain software industry segment. That is a considerable slug of money over a short period of time. On a year-over-year basis, deal activity has increased 50 percent in a displayed graph that extends back to Q1-2010.
Rather interesting is that the posting notes that the increasing complexity of global supply chains has peaked interest in primarily Stage One, early stage investments in mobility, same-day delivery and cloud based end-to-end platform investments. My interpretation is that investors are seeking the next “big wave” of technology focused customer solutions directed at overcoming supply chain complexity and time critical dimensions of customer fulfillment. More responsive supply chain logistics and supply chain control tower capabilities seem to be the new attraction.
Whatever the reasons, this new wave of private and public investments is good for supply chains and B2B focused networks since it assures that product innovation will continue to primarily stem from up and coming or best-of-breed market providers.
That is indeed the good news for industry supply chain teams as well as all technology and services oriented players.