War. Union strikes. No more global lockdowns. Inflation. Skyrocketing energy prices.
Every major news story of 2022 ultimately boiled down to one big question: how will this affect global supply chains?
Startups were eager to ease these tensions. Even though overall venture capital has shrunk, supply chain finance has soared. Growth-stage startups have closed nearly $8 billion in venture capital deals over the past twelve months, according to data available from Crunchbase. In the Southeast, the biggest fundraisers went to Checked ($25 million Series B) and Stord (120 million dollar expansion tower).
When you expand to the broader logistics, transportation, and warehousing ecosystem, the Southeast startup scene has grown even faster over the year.
Local e-commerce logistics and warehousing startup salt shaker raised a $35m Series B while expanding its physical footprint across the US, while ATDC signed a partnership with the transportation giant South Norfolk to help strategically build greener and more sustainable startups.
International startups have also burst into the Southeast. Exotec, a venture capital-backed Parisian warehousing robotics startup, officially opened its US headquarters in December on a soon-to-be-opened section of the Atlanta BeltLine.
Exotec, with its global fleet of 4,000 bots, moved to Atlanta to take advantage of the city’s logistics infrastructure and be closer to its US-based warehousing customers. The team is being hired quickly as they work to be the reference
Monitor storage space
Robots aren’t the only ones transforming supply chain and warehouse spaces. Local founders like Matt Fain are on a mission to transform the way businesses find shelf space.
“Most people are very aware that we’re going to get this bullwhip effect,” Fain told Hypepotamus. “We all know that people brought way too many things when they were hit by a pandemic that was out of stock. The inventory wasn’t on the shelves, they panicked. [Companies] brought in more products than ever before and put them in warehouses and it took up more space than ever before…just to find out they didn’t bring in the right things.
This means an opportunity for innovation in the warehouse, Fain says. And that means big business for startups like Fain’s startup Pop Capacity, which is building a new type of marketplace for warehouse providers and shippers. Fain describes it as “Airbnb for warehouse space.”
The marketplace eliminates the friction associated with using a broker to find needed warehouse space and instead allows those with excess space to post that availability for free.
Ultimately, this can create new business leads – and more shelf-stocking opportunities – for warehouse owners and 3PLs.
“There is so much friction in the world of logistics, transportation and supply chain. We didn’t want to create more,” Fain added.
Just two years old in operation, Popcapacity has kicked off to date and now has over 21 million square feet of available market space.
What’s the vibe there?
We asked investors, founders and thought leaders to comment on lessons learned in 2023 and what they expect from the supply chain and logistics industries as we enter the new year .
“The problem for a supply chain manager is that there is always a problem to solve, whether the times are good (high volumes) or bad (low volumes). As consumers forego buying goods for more services and also grapple with the realities of inflation, businesses will shift into margin-preserving mode. Unlike previous recessions, this must be balanced with the shocks supply chains have faced over the past two years that require greater resilience,” said Santoch Sankar of Dynamo Ventures, based in Chattanooga. “Brands and retailers are questioning their supply chain operations and the related technology needed to support them through good times and bad.”
Sankar said he sees automation, sustainability, integrated payments and proximity opportunities as innovation points in the space in 2023 and beyond.
For Chris Fagan at Moore Colson, bulk inventory and shrinkage were two of the big stories of the past year. His work with privately held manufacturing and transportation companies has given him a front-row seat to the changing nature of supply chain constraints.
“As companies have had time to adapt throughout the year, supply chains have not completely filled up…as consumption is still higher than it was a few years ago,” said Fagan to Hypepotamus.
This means that many companies have entered into long-term supply contracts to increase inventory levels, because “the cost of depleting it is higher than the cost of keeping it”, he added, while that other companies have simply reduced the quantity of products sold per unit to expand inventory levels.
While working at the intersection of fintech and construction, Chris Boyd at Built Technologies, based in Nashville, has seen the very real effects of supply chain issues on the housing landscape in the United States.
“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 is still a tremendous amount of pent up demand that we need to meet…but the [wait time] for supplies is 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 the supply chain, logistics and transportation spaces. As conferences are once again in full swing, you might want to check out these upcoming networking opportunities:
jump start – January 23-25, 2023 in Atlanta, Georgia
Georgia Logistics Summit – March 8, 2023 in Savannah, Georgia
CSCMP Edge Supply Chain Conference and Expo: October 1-4, 2023, Orlando, Florida
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