Supply-Chain Startup Draws Funding

"Project44, which develops supply-chain analytics software for shipping and logistics companies, said it raised $420 million in a funding round that values the company at $2.2 billion.

The deal was the latest instance of investors placing big bets on technology startups that might smooth the supply-chain snarls that have racked companies.

Venture investors committed a record $24 billion to supply-chain tech companies based in North America and Europe through the third quarter of last year, a nearly 60% jump from all of 2020, according to analytics firm PitchBook Data Inc. Meanwhile, valuations for these startups are rising. Median late-stage valuations, for instance, rose 41% to $120 million through the third quarter compared with 2020.

A crop of these startups, including Chicago-based Project44, offer software platforms from which logistics companies can oversee and manage their goods as they navigate supply chains around the world. Project44 collects information from data sources such as shipping providers using application programming interface technology, or APIs. Project44 says its product offers companies a detailed view of where their goods are, allowing them to optimize interconnected supply chains and reduce shipping times and costs.

The funding round for Project44 was led by tech-focused private-equity firms Thoma Bravo, TPG Capital and Goldman Sachs Asset Management. Firms including Emergence Capital, Insight Partners, Chicago Ventures, Generation Investment Management, Sapphire Ventures and Sozo Ventures participated in the deal.

Shipping bottlenecks have wrenched companies ever since the pandemic closed factories, cut into the labor force and disrupted goods transport around the world. The snags led investors to jump into a legacy sector many say is ripe for a technological makeover.

"Supply-chain visibility has become increasingly important as shortages, delays and bottlenecks ramp up," Thoma Bravo partner Robert Sayle said in a statement announcing the Project44 funding round.

In September, supply-chain software startup Stord tapped investors including venture firm Kleiner Perkins for a $90 million Series D round, which valued the company at $1.1 billion.

In addition, corporations that have been stalwarts in the logistics industry have invested in logistics technology. Shipping giant A.P. Moeller-Maersk AS and Koch Industries Inc. have participated in deals in the sector from their venture-capital arms.

Project44 says it generates more than $100 million in annual recurring revenue from customers including Amazon.com Inc., FedEx Corp. and Home Depot Inc. Jett McCandless, founder and chief of Project44, said last summer that he was aiming to add more Chinese manufacturers as customers to draw on the shipping data they could provide when goods leave the factory floor." [1]

1. Supply-Chain Startup Draws Funding
Vartabedian, Marc. Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]. 12 Jan 2022: B.11.