Traditionally, to have a full overview of their supply chain, most companies need to piece together a variety of fragmented third party logistics that frankly don’t work together seamlessly. With multiple logins, slow optimization, limited capacity, and patchy visibility (the list of limitations goes on… but we’ll spare you the time), companies are left in the dark with an inefficient supply chain, missing inventory, disappointed customers, and ultimately a lower bottom line. The system just does not make sense anymore. That’s where logistics and supply chain technology startups come in.
There is a herd of unicorns pushing for innovation in the logistics industry. Stord, ShipBob, and Flock Freight are a few that are leading the pack with developments in software, warehousing, freight, and delivery.
In 2021, all of these companies reached a valuation exceeding $1 billion, officially welcoming them into the unicorn club. Investors are seeing the value in the technology these companies are developing and are funneling money into logistics and supply chain technology now more than ever before.
“Supply-chain technology startups raised $24.3 billion in venture funding in the first three quarters of 2021, 58% more than the full-year total for 2020, according to analytics firm PitchBook Data Inc.,” says writer Jennifer Smith in her recent Wall Street Journal article.
As the national news headlines have highlighted, supply chain is facing everything from driver shortages to bottlenecks at ports and warehouse space limitations right now. Although this challenges the industry, it also has brought much more attention to the sector.
With e-commerce booming and higher expectations from end customers, businesses are looking to improve their supply chains while decreasing costs. All eyes are on supply chain recently, and there is no other option but to fix the cracks in the foundation. Innovative companies are stepping up to the challenge, and investors are noticing. Pressure builds diamonds.
The amount of investment in the industry has created immense growth and opportunity for companies to showcase their new technologies, and it does not look like it will be slowing down any time in the near future. Investors are taking on a risk investing in startups, but as long as companies continue to focus on the end goals and keep improving their margins, the risk is not a bad thing.
Keep your eye out for innovations in warehouse management systems, freight, data analytics, fulfillment, and more. This is just the beginning… or as we like to say here at Stord, this is day 1.