Another day, another funding announcement in the supply chain as investors continue to pump capital into an industry navigating its way through digitization.
The latest funding highlights the rapid changes brought on by new technologies across the supply chain, from first to last mile and everything in-between, creating a patchwork of solutions that leaves some to question whether the systems will ultimately play nicely in the long run, or if new headaches are on the horizon for what is already a complex goods movement system.
Digital freight forwarder Forto’s latest raise of $250 million, announced this week, sends the Berlin company’s valuation to $2.1 billion.
The Series D brings its total raised to date to more than $600 million. Austin-based tech investment firm Disruptive led the round, which also included Softbank Vision Fund 2, G Squared, Northzone, Unbound and A.P. Moeller Holding.
Forto helps its roughly 2,500 customers move their product by ocean, air and rail and also offers services such as customs clearance, insurance and freight consolidation, all via a digital platform touted as easy enough for a company’s marketing manager to handle the import process.
“As our business remains well funded from our previous round in 2021, this new round will simply allow us to accelerate the execution of our existing strategy, particularly geographic expansion,” Forto CEO and cofounder Michael Wax said in a statement. “It will allow us to further widen our customer offer, bring our technology platform support to customers in new markets and capitalize on new opportunities as they arise.”
Markets the company’s eyeing for expansion include Poland, Belgium, Sweden and southern Europe this year. Additions to its workforce of more than 750 across 16 locations are also expected.
Further up the supply chain, San Jose-based Silq, whose platform helps fashion and home goods companies with factory updates and shipping, on Wednesday said it raised $17.6 million. The Series A was led by F-Prime Capital and digital freight forwarder Flexport’s corporate venture arm Flexport Ventures. Silq links brands with factories in a bid to streamline oversight of the manufacturing process.
The raise pushes Flexport, whose platform assists companies with the transportation aspect of their supply chains, into the product sourcing and production realm.
Silq’s news follows Tuesday’s announcement by Toronto-based Calico that it raised a $2 million seed round led by tennis pro Serena Williams’ Serena Ventures. Calico’s platform, like Silq, also focuses more on the first mile and is built for fashion companies’ sourcing and production teams to manage communications with factories, improve forecasting and receive product on time.
The latest investments are coming fast and furious into logistics and the broader supply chain, with investor interest seemingly tech agnostic.
Flexport itself last month closed on a $935 million Series E, bringing its valuation to more than $8 billion. Loadsmart, also in February, raised a $200 million Series D to continue building on its freight technology. There was also supply chain visibility platform Project44’s $420 million raise in January.
Companies face a big question today, said Logixboard CEO Julian Alvarez, as more digital options emerge: do they partner with a software vendor for a product off the shelf, or build something in-house?
“It’s interesting. I think we’re seeing a lot of companies, now that we have built this sort of technology over the last five years, actually starting to transition to working with us,” Alvarez said.
Logixboard raised $32 million last month, with the capital expected to help build on its software aimed at helping freight forwarders and customs brokers digitize their businesses with document sharing, accounting, messaging and shipment tracking.
“A big part of it is you have so much money coming into the market from venture, we’re going to continue to improve our product really quickly,” Alvarez said. “For folks that have chosen to build [in-house], they spend millions of dollars on those investments, but those investments can really often go stale if they don’t continue to innovate. Software becomes pretty obsolete within two years if you’re not innovating, so a lot of folks that have built their own technology are now coming to us.”
To Alvarez’s point, companies across the supply chain are at a time of significant change. Covid pressed on the importance of companies owning their supply chains, which really stems from the concept of visibility—a buzzword among tech providers. What that actually means, particularly when there’s less predictability around ocean container shipping, is difficult to define.
“What does it mean to have a truly end-to-end solution and what does it mean to have an end-to-end solution when the ships are so imbalanced that you don’t know the schedules?” supply chain consultant Jon Monroe of Jon Monroe Consulting asked a packed room on the final day of the TPM22 Conference last week.
Part of that is understanding the capabilities of each vendor and that’s not necessarily an easy task with the industry in the early innings of its digital adoption.
“I think we’re still learning our ABCs,” Monroe said when asked about the industry’s digital literacy. “Our industry, we resist technology, but it’s not just technology we resist. We resist sharing data and that’s the biggest issue we’ve got because that’s what it’s all about…. It’s a great period of time for all of us to learn and grow.”