War. Union strikes. More global lockdowns. Inflation. Skyrocketing energy prices.
Every major news story of 2022 ultimately boiled down to one big question: How is this going to impact global supply chains?
Startups were ready to ease those tensions. Even though overall venture capital deployment decreased, supply chain funding soared. Seed through growth-stage startups closed close to $8 billion in venture deals over the last twelve months, according to available Crunchbase data. In the Southeast, the largest funding rounds went to Verusen ($25 million Series B) and Stord ($120 million extension round).
When you expand to the larger ecosystem of logistics, transportation, and warehousing, the Southeast startup scene grew even more rapidly over the course of the year.
Homegrown e-commerce logistics and warehousing startup Saltbox raised a $35 million Series B while expanding its physical footprint across the United States, while ATDC inked a partnership with transportation giant Norfolk Southern to help strategically build greener, more sustainable startups.
International startups also splashed down in the Southeast. Exotec, a venture-backed warehousing robotics startup from Paris, officially opened up its US headquarters in December off a soon-to-open section of the Atlanta BeltLine.
Exotec, with its global fleet of 4,000 robots, moved to Atlanta to take advantage of the city’s logistics infrastructure and to be closer to its US-based warehousing clients.
Watch the warehousing space
It’s not just robots that are transforming the supply chain and warehousing spaces. Local founders like Matt Fain have been transforming how companies find shelf space in our post-Covid world.
“Most people are very well aware that we’re going to experience this bullwhip effect,” Fain told Hypepotamus. “We all know that people brought in way too much stuff when they had a stockout pandemic hit. Inventory wasn’t on the shelves, they freaked out. [Companies] brought in more products than ever before and placed them in warehouses and that consumed more space than ever before…just to find out that they didn’t bring in the right stuff.”
That means opportunity for warehouse innovation, says Fain. And that means big business for startups like Fain’s startup Popcapacity, which is building a new type of marketplace for warehouse suppliers and shippers. Fain describes it as “Airbnb for warehouse space.”
The marketplace eliminates the friction associated with using a broker to find necessary warehouse space and instead allows those with excess space to post that availability for free. That creates new business leads – and ultimately more opportunities to fill shelves – for warehouse owners and 3PLs.
“There’s so much friction in the world of logistics and transportation and supply chain. We didn’t want to create more,” Fain added.
Popcapacity has bootstrapped its first two years as a business and now boasts upwards of 21 million square foot of available space on the marketplace.
What’s the vibe out there?
We asked investors, founders, and thought leaders to weigh in on lessons learned over 2022 and what they are expecting in the supply chain and logistics industries moving into the new year.
Santosh Sankar of Chattanooga-based Dynamo Ventures, said he sees automation, sustainability, embedded payments, and nearshoring opportunities are trends to watch as we move into 2023 and beyond.
“The plight of a supply chain manager is that there’s always a problem to solve whether times are good (high volumes) or bad (low volumes). As consumers pullback on purchasing goods for more services and also grapple with the realities of inflation, companies will go into margin preservation mode. Unlike prior recessions, this must be balanced with the shocks supply chains faced in the last two years that call for greater resiliency,” said Sankar. “Brands and retailers are questioning their supply chain operations and the related technology required to support them in good times and bad.”
For Chris Fagan at Moore Colson, bulk inventory and shrinkflation were two of the big stories of the last year. His work with private equity owned manufacturing and transportation companies gave him a front-row seat to the changing nature of supply chain strains.
“As companies have had time to adapt throughout the year, supply chains haven’t completely filled back up…because there’s still a higher amount of consumption than there was a couple of years ago,” Fagan told Hypepotamus.
That meant many companies entered into long-purpose supply contracts to increase inventory levels, because “the cost of running out is more expensive than the cost of holding it,” he added, while other companies simply decreased the amount of product sold per unit to extend inventory levels.
While working at the intersection of fintech and construction, Chris Boyd at Nashville-based Built Technologies has seen the very real ways that supply chain issues have impacted the US housing landscape.
“The reality is that after 2008, when so much of the construction volume dropped so significantly, we still haven’t caught up as a country,” he told Hypepotamus. “Now with inflation with labor shortages, and the [rising] cost of materials in general, the reality is that there’s still a tremendous amount of pent up demand that we need to satisfy…but the [wait time] for supplies is just so long. I’ve even heard many stories of builders ordering materials before they even know exactly what house they’re going to build.”
Where to be in 2023
The new year will be filled with events designed specifically for those in supply chain, logistics, and transportation spaces. With conferences back in full swing again, you might want to check out these upcoming networking opportunities:
JumpStart – January 23 – 25, 2023 in Atlanta, Georgia
Georgia Logistics Summit – March 8, 2023 in Savannah, Georgia
CSCMP Edge Supply Chain Conference and Exhibition: Oct 1-4th, 2023, Orlando, FL