Funding the Next Generation of Supply Chain Disruptors

Everywhere you look these days, companies, economists, and government officials are citing the ongoing supply chain issues that are present as the economy struggles to restart from the pandemic. In fact, J.P. Morgan is saying the current supply chain and inventory issues present in the global economy are unprecedented outside of a recession. 

Many shippers, trucking companies, and manufacturers remain poorly connected and inefficient, relying on antiquated workflows built on paper records and manual labor. Distributors and retailers feel the pressure from both sides: dealing with disruptions, shortages and surges in demand from both suppliers and customers. The entire supply chain is ripe for Amazon-like efficiency and clarity. 

This will be driven by factory and warehouse level automation, robotics, best-of-breed fulfillment, supply-chain finance, and logistics software like our investments in Alloy, Enable, Fox Robotics, RightHand Robotics, Scout RFP (acquired by Workday), ShipBob, and 6 River Systems (acquired by Shopify).

As we discussed, global supply chains experienced incredible disruptions over the last year, driven in part by COVID and adopted technology at an unprecedented pace. But this is not a case of a COVID tailwind that will dwindle by 2022. The digitization of the industry is indeed the new normal.

Supply chain and logistics providers are increasingly relying on automation as they try to catch up with a labor demand that is growing  faster than they can hire workers to meet it. Nearly 168,000 jobs at warehouse and storage companies were added from April 2020 to April 2021 (an increase of more than 13%), but according to the Bureau of Labor Statistics, many employers in the space report that they still can’t meet skyrocketing demand. The labor market for supply chain and logistics was already tight. The uptick in demand combined with social distancing rules due to COVID made it that much more difficult to hire. 

Enter the new generation of supply chain and logistics disruptors. It’s a category that we are proud to back at Menlo Ventures, investing in both hardware and software solutions.

On the software side, ShipBob is streamlining fulfillment for e-commerce businesses by bringing them Amazon-style next-day and two-day shipping options. Enable is driving efficiency by solving the busted workflow of B2B rebate management with a software solution. Alloy.ai provides businesses with a digital platform that aggregates and analyzes supply chain data to provide actionable insights and more visibility into consumer demand. (Vertical SaaS is another area we’re excited about—read more about how we look at potential SaaS investments.)

On the hardware side, we’re bullish on robotics. Fox Robotics’ autonomous forklifts can load and unload trucks with ease and efficiency. RightHand Robotics uses AI and machine learning to automate the picking of items in warehouses. 6 River Systems’ autonomous robots use AI and smart routing technology to drastically increase pick rates in warehouses and fill the void that labor shortages have created.

If you’re an entrepreneur solving e-commerce and supply chain pain points, we want to hear from you!