European supply chain start-ups appear to be making the most of the huge wave of investment in digitalization. As the basis for its annual Maturity Matrix, Supply Chain Media analysed a total of 125 start-ups in Europe and surveyed 41 of them...
European supply chain start-ups appear to be making the most of the huge wave of investment in digitalization. As the basis for its annual Maturity Matrix, Supply Chain Media analysed a total of 125 start-ups in Europe and surveyed 41 of them. According to over 60% of those surveyed, they now have more sales leads than they did before the COVID-19 pandemic. Since last year, besides growth in the number of supply chain sustainability-related players, new start-ups have also emerged in transport planning and demand planning.
Due to the various lockdowns and the economic crisis caused by the coronavirus pandemic, 2020 was a very tough year for many European supply chain start-ups. Although the rough waves of the turbulent economy left most of them clinging to the rigging, a few start-ups actually benefited from the pandemic – such as the Dutch start-up Quicargo, an online road freight platform which succeeded in tripling its revenue in 2020.
The problems in global supply chains, combined with the rapid recovery of economies around the world, has meant that the tide has completely turned in the start-ups’ favour, according to Supply Chain Media’s latest Maturity Matrix. This annual matrix shows the position of start-ups in different solutions categories and their business maturity along the vertical axis. The maturity is assessed based on the company’s age, number of employees, number of awards won, number of customers and – in particular – the amount of capital raised.
To compile the Maturity Matrix, Supply Chain Media analysed a total of 125 European start-ups based on their proposition, competitive landscape and capital raised. 41 of those start-ups also completed a questionnaire about their commercial situation. Perhaps surprisingly, the findings reveal that the current state of their business is generally more positive than before the pandemic.
Over 60% indicate that they have more sales leads in the pipeline than two years ago. Just over half state that more potential customers are keen to do a pilot with them, and for 37% the situation is roughly the same as before the pandemic.
At the beginning of the coronavirus crisis, 72% of start-ups said that fewer potential customers were willing to sign a contract, and for the rest the situation was roughly the same as before the pandemic. In contrast, almost 25% now say that more new customers are prepared to sign a contract, while existing customers have also become slightly more willing to increase their level of business. One challenge that remains unchanged over the past two years is the difficulty to recruit new employees. On the other hand, according to the respondents, it has become easier to attract investment capital and also to expand internationally than it was before the pandemic.
When comparing themselves to the competition, 90% of the start-ups describe their solution as unique. This is a similar percentage as two years ago. “Company founders always claim to have come up with a unique solution,” states Mathias Bosse, angel investor and compiler of The Supply Chain Management Startups Handbook 2021. “Sometimes this will be due to arrogance, but on the other hand they have to say this to secure the capital they need. Most founders of supply chain start-ups do actually have in-depth knowledge of the processes they want to improve, and different start-ups often offer different solutions to the same logistics problem. But above all, a start-up founder doesn’t usually want to be compared to other companies, and especially not to existing ones.”
To prepare a clear overview of the very diverse supply chain landscape, Supply Chain Media has divided the Maturity Matrix into ten categories. This year, the Warehousing on Demand category (a kind of ‘Airbnb for pallets’) has been left out of the matrix, and the start-ups Sharehouse and Stowga have also ceased trading. Stockspots in the Netherlands, SpaceFill in France and Warehousing1 in Germany are still in business, even though there seems to be much less need for temporary storage due to the current stock shortages throughout supply chains.
The new category of Demand Planning & Forecasting has been added to the matrix in a clear sign of the rise of machine learning and artificial intelligence. The French scale-up Flowlity is an excellent example of an innovative player in this area and it was the deserved winner of the European Supply Chain Start-up Contest in 2020. Other emerging players in this category include Optiply from the Netherlands and Pelico, another French start-up.
Several start-ups are making use of machine learning, new internal factors and external data in Transportation Planning, which is another new category in the matrix. This category has some overlaps with the firmly established category of Road Freight Platforms, which in turn nudges up against the densely populated category of Last-mile Delivery Solutions from start-ups and scale-ups.
The Blockchain for Supply Chain category, which was added last year, continues to attract attention. The increasing scarcity of raw materials and parts means that blockchain is becoming an interesting solution for supply chain visibility and automated administrative processing. Meanwhile, the Supply Chain Sustainability category has grown rapidly, with a number of newcomers in the matrix. Two of the new entrants – Searoutes and Tracks, both from Germany – regard the Dutch scale-up BigMile as their main competitor.
The supply chain start-ups and scale-ups certainly seem to be reaping the benefits of the huge amount of capital on offer from investors right now. They are like agile surfers, biding their time until the right wave comes along. But they need to remember that, beneath the waves, the established software vendors are lurking – like great white sharks waiting for surfers to fall off their boards.
Martijn Lofvers is founder and CEO of Supply Chain Media and Chief Trendwatcher of the Dutch Supply Chain Magazine and the European quarterly magazine Supply Chain Movement. He is a regular speaker on the topics of company and supply chain strategy, scenario planning and business trends, supply chain start-ups, innovation and technology application at international conferences. Contact: Martijn.Lofvers@supplychainmedia.nl
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