#VENTURE LOGISTICS INDIA FULL#

Most funding goes to startups working on last-mile and freight platforms These findings show that growth is no longer fueled by having multiple funding rounds instead, it occurs as startups reach maturity and receive larger funding rounds. Over the same period, the average deal size and total funding grew threefold (Exhibit 1). In our sample, the number of reported deals was stagnant from 2016 to 2018 then dropped in 2019. Venture capitalists (VCs) have recently invested around $28 billion in logistics startups, nearly all of it since 2015. For more information on more recent developments, see the sidebar “The impact of COVID-19 on logistics startups and venture-capital funding.” Venture capital discovered the logistics industry in 2015 The remainder of this article teases out lessons from one chapter of the report. In our new report, Startup funding in logistics: New money for an old industry?, we analyze more than 120 of the biggest logistics startups-representing an estimated 93 percent, or $26 billion, of total startup funding in logistics to date-and explore recent funding trends and their implications for incumbents, startups, and investors. While low profitability has made it difficult for the industry to address these issues, a new generation of logistics startups aims to solve them. a greater push for industry-based standards for easier or mandated digitization, such as TradeLens (IBM/Maersk) and those from the Digital Container Shipping AssociationĪ new generation of startups may base their initial business plan on insights from this crisis period.more investments to promote future supply-chain resilience.a huge competitive advantage for logistics companies that have strong operational control and state-of-the-art digitization, such as Flexport.a higher interest in buying or partnering with plug-and-play solution startups.This insight has led to some interesting phenomena: The COVID-19 crisis has also revealed the need for greater visibility and agility in supply chains-something that can only be achieved only through higher usage of digital tools and processes.

#VENTURE LOGISTICS INDIA FULL#

Their potential options include looser forms of operational and commercial partnerships, financial commitments or business equity, and full takeovers of selected startups. Large corporations now have a real chance to collaborate with startups, especially those that want closer partnerships with established players to secure volumes, scale up operations, increase cash flow, and improve financing. And as with past crises, they may see business grow as companies begin to question the status quo in operations, ultimately resulting in higher logistics outsourcing rates. In the long-term, the most resilient logistics startups may accelerate digitization and innovation, while also becoming more agile. Startups are relying on advanced digital backbones and front channels, as well as digital solutions that help them adapt rapidly. At present, however, demand has stalled temporarily because the budgets of potential customers are frozen. According to a survey by Ocean Insights, 67 percent of shipping and freight professionals plan to invest in logistics technology following the COVID-19 crisis. For instance, Instacart hired 300,000 new workers to meet surging demand for grocery deliveries.īusinesses within the overarching category of logistics analytics are facing an increased demand for digital supply-chain solutions. Startups are fighting to increase capacity without jeopardizing the health of their employees and subcontractors, incurring costs higher than income. Even the largest players have had difficulty scaling up operations. Demand for home deliveries has increased substantially because many brick-and-mortar stores are closed. Overall, 70 to 80 percent of belly cargo capacity has vanished, leading to fierce competition and skyrocketing prices.Į-commerce and large online retailers are experiencing similar challenges. Many companies are having difficulty accessing transport capacity, especially within air cargo. Ocean-freight volumes in the first quarter of 2020 were down 20 percent from a year earlier. The volume declines for freight transport are similar to those for traditional logistics companies. The short-term impact of COVID-19 varies by logistics subsector. Logistics startups are thus focusing on securing liquidity and cash flows from operations, since growth funding has temporarily dried up. Startup and venture capital funding for logistics fell from $3.5 billion in the first quarter of 2019 to $700 million in the first quarter of 2020 as the coronavirus spread worldwide.

Venture logistics india