In today's fast-paced and interconnected world, supply chains play a central role in our daily lives. From getting groceries on the shelves to delivering the latest gadgets to your hands, supply chain management is the backbone of modern economies. Driving the evolution of these supply chains is a dynamic ecosystem of supply chain tech startups, which are helping take efficiency, sustainability, and resilience to new heights.

Supply chain tech venture trends

Venturing into the rapidly evolving startup ecosystem, we see a world marked by innovation, changing investor sentiment, and a renewed focus on sustainability and digitalisation.

The supply chain tech startup ecosystem has raised more than USD 200bn in venture funding since 2016. The funding reached its peak in 2021, with the disruption in global supply chains amid the COVID-19 pandemic highlighting the central role of tech companies in addressing the challenges.

The ecosystem experienced a noticeable dip in 2022 and 2023. In 2022, the number of deals decreased by 26% and the funding level by 59%. This was due to a combination of factors including global inflation, rising interest rates, economic uncertainties, and geopolitical tensions. These factors have influenced investor sentiment and continue to do so today. This trend is not limited to the supply chain industry. There is a broader trend of slowing down venture capital investments on a global scale and across industries.

In 2024, supply chains are likely to encounter ongoing disruptions. Recent years have revealed supply chain deficiencies like a lack of visibility, transparency, and traceability. This means one of the focal points of innovation for 2024 will be technology solutions addressing these gaps, such as digitalisation of supply chain management and implementation of AI-powered solutions to optimise supply chains.

Green tech startups pave the way for sustainable logistics

Sustainability is the name of the game for many supply chain tech startups. Investors are increasingly favouring sustainable logistics models with venture funding for climate-conscious logistics.

According to Pitchbook data, sustainable logistics startups within the supply chain tech startup ecosystem raised 14% of total venture funding in 2021, and that share increased to 29% in 2022., Pitchbook figures also show that startups working on decarbonising supply chains have raised a total of more than USD 130 billion since 2016. This funding has gone to initiatives such as reverse logistics platforms, electrification of last mile deliveries, decarbonisation of all modes of transportation, green construction tech, and SaaS (Software-as-a-Service) platforms related to carbon accounting and traceability. In general, climate technologies have a strong interdependence, so understanding these and collaboration between industries will be critical for reaching net zero greenhouse gas emissions across supply chains.

AI-powered supply chain startups boom

AI-powered startups are leading the charge in optimising supply chains and according to Pitchbook they have attracted USD 50.5bn since 2018 accounting for 33% of total supply chain tech venture funding, USD 152bn. Pitchbook data shows more than 500 startups are leveraging AI to transform logistics, covering everything from autonomous trucks to warehouse automation and digital twins of supply chain.

AI will be, and is a game-changer in supply chains, enabling accurate demand forecasting, dynamic route planning, predictive scenario simulations, and workflow automation.

The future of the supply chain tech startup ecosystem

The supply chain landscape is evolving rapidly driven by technological innovation, sustainability priorities and a push for resilience. After a peak in funding in 2021 due to pandemic challenges, the following years witnessed a dip, influenced by global economic factors.

Looking to the future, the supply chain industry is expected to address gaps in visibility, transparency, and traceability. Digitalisation of supply chains will likely be at the forefront, with startups helping to shape a more resilient and efficient future for global supply chains. In addition to that, sustainability is a key theme in logistics, with green tech startups securing significant funding which underscores a growing commitment to climate-conscious solutions.