Episode Summary
The ‘TECHquila Sunrise’ Series on Supply Chain Now shares the latest investments, acquisitions, innovations, and glorious implosions in Supply Chain Tech every week. If you are looking for a podcast about ‘so-and-so signed a contract with such and such,’ or ‘they just released version 20 of that same technology you didn’t buy last year,’ this is the wrong podcast for you. But if you are looking for real news and innovation, welcome to the Sunrise.
In this episode of ‘TECHquila Sunrise,’ Supply Chain Now Host Greg White discusses recent articles on the following topics:
- How far has the digital supply chain advanced? Whether you should rip-and-replace your legacy solutions or continue customizing them (or possibly a third solution)
- Inclusive investment: 3% of VC dollars currently go to women, and less than 1% of go to other minority groups – mostly because VC’s tend to go to their personal network to find opportunities.
- This week’s deal numbers from Crunchbase: 241 founding rounds were completed, representing $21.1B in investment and 54 acquisitions worth $1.5B in total
Episode Transcript
Greg White (00:00):
Hey, this is Greg white. And on the very first episode of tequila, sunrise, we’re going to be talking about what’s going on with Connexus big deals and inclusive investing a little bit about the ground rules. Join us, listen up. It’s time to wake up to tequila sunrise, where we share the latest investments, acquisitions, innovations, and glorious implosions in supply chain tech every week at this unholy hour of the day. And also unfortunately, without the aid of tequila or coffee or intoxicated, any kind, join us every Wednesday to discuss the news and supply chain tech. Greg white was supply chain. Now here, always happy, never satisfied, willing to acknowledge reality, but refusing to be bound by it. My goal is to inform, enlighten and inspire you. Here’s a little disclaimer, we’re piloting this series. So I welcome any and all questions. Comments, arguments, reputations, even see stories.
Greg White (01:14):
If you like this series say so, and don’t forget to subscribe at supply chain now, radio.com or wherever you get your podcasts. It’s only going to survive if you listen, Hey, just a little heads up on how the series is going to go. Don’t worry. We’re not going to spend time on silly PR schemes. Like so-and-so signed a contract with such and such, or just released version 20 of that same technology you didn’t buy last year. This’ll be real news and innovation, and I’ll include the link to any articles referenced in the show notes and accompanying blog on supply chain. Now radio.com. All right, let’s get right into this week, June 22nd, 2020, since this is our first show, let’s start with some industry perspective and drop some valuable knowledge on you. Couple great articles, defining buzzwords for news and information you can use. I like this particular article from Steve banker at Forbes, he’s clearly defining control towers, what they are, how they enable supply chain agility and how building complexity into technology allows solutions to be simple for users.
Greg White (02:19):
We’re going to drop the links in the show notes and it’s worth it. Just two minutes that it’ll take to read. It’s called supporting supply chain agility, simple concepts, complex technology. How far has the supply chain advance? This is a bit deeper read from logistics management, but as we discussed on supplies chain buzz with Scott Luton last week, I believe, or the week before, if you’re feeling ambitious and highly caffeinated, this is well worth your five minutes at time. Bridget McCray reports from a cap Gemini research Institute report that worldwide spending on digital transformation technologies that includes hardware, software and services will cross the $2 trillion Mark by 2021. At the same time, companies still are struggling to implement digital transformation. Get this just 35% of companies are monitoring their operations in real time. And that’s versus 48% who were in 2012. The last time cap Gemini did this research.
Greg White (03:22):
29% are modifying their operational processes to adapt quickly to external changes versus 34% in 2012 and only 38% are giving employees the tools they need to collaborate digitally with one another compared to 70% in 2012, the big Delta in that particular number, it makes me wonder if we haven’t changed the playing field a bit. I wonder if in 2012 email was considered digital collaboration. There’s some other interesting topics here. The leading topics really cloud is the fastest growing market segment. Gartner says its use increased 27.5% in 2019, reaching 38.9 billion up from 30.5 billion in 2018 data robotics, AI, blockchain, all topics of interest as well. But an interesting side note here is a segment of the article that talks about whether companies should rip and replace or continue customizing their legacy solutions. So think about those old supply chain solutions or finance solutions or ERP solutions that you have that have become unwieldy with customization companies are trying to decide whether to pull those out or continue customizing them.
Greg White (04:44):
I would argue there’s a third option and I’ve seen companies doing this for some years now where they’ll take a data layer and put it over the top of their legacy solution and feed the valuable data out of that legacy solution into that, translate it for the use of more advanced technologies that they’ll layer on top less risky, less costly and less disruption to some of the foundational functions that still remain in old finance or even supply chain solutions. So take a read it’s it is in my opinion, a must read. How far has the digital supply chain advance on logistics management.com? Again, I’ll drop the link in the show notes here, and you can take a look at it. All right. Now let’s talk about an investment topic. That’s been a long time coming. Venture finance is renewing their efforts for inclusive investing in bringing the availability of investment capital to all the first.
Greg White (05:43):
Let’s talk about this unique model that prompted me to surface this discussion. A company called collab, capital Atlanta based and founded by Juul, Solomon Berks, Justin Dawkins, and Barry givens solely in black founders. Initial limited partners of the firm include the Kauffman foundation of the Kansas city, Royals and LaCroix. Their investment model is pretty innovative to a profit sharing model. So look forward to following that. The article about collab is in Crunchbase innovation. Doesn’t have a color and again, posted in the show notes. Let’s talk about Fincher in general, newer firms, one I’m familiar with called Kibera venture capital for instance, are following a model from next gen venture partners who put this in place many years ago, and many others have an intentional investment model based on seeking out and funding diverse founders. The statistics in, in investment are concerning shocking. Let’s say the industry stats have set a really low expectation.
Greg White (06:52):
3% of VC dollars are going to women. And for other minorities it’s even worse at less than 1%. A lot of that is attributed to the way venture capital firms are structured. Traditionally, the partners leverage their personal networks to source deals. And if you’re not in those networks, it can be really difficult to get warm introductions while the industry is becoming more aware of these issues and representation is improving. Ultimately the people that are making the decisions are fairly homogenous. As a quote from the article, traditional investors are also consciously embracing the inclusive models by intentionally extending their personal networks. And that’s what it’s going to take. Truly none of this effort in the investment community is in response to recent events, but heightened awareness has made it newsworthy. And it’s commendable that media are sharing and investors are introspecting and changing things rapidly. This is a great opportunity for everyone to benefit inclusive, investing, reaches all and more diverse points of view are always beneficial to knowledge, ideas, and success.
Greg White (08:02):
It’s time. The industry did something and I’m glad to see some progress here. We’ll keep an eye on how this turns out and I’m really interested in what’s going on with collab. Capital are at a couple of headlines on some massive valuations, Instacart and door dash both got massive valuations over $13 billion. Look the rise in eCommerce due to COVID-19 and the subsequent seismic societal disruption sending everyone home has fueled last mile delivery woes. But in this case, it’s really well being for at least two companies, literally delivering change to consumers, Instacart pushes its way to a 13 point $7 billion valuation with a new $225 million funding. Round Instacart is well known as the grocery delivery company. Obviously that became a big thing as grocery stores surged, and as people stayed home in droves door dash is close to funding a deal that would value the company at $15 billion pre money.
Greg White (09:08):
You may know that door dash is a delivery for typically quick serve QSR restaurants, and they too have seen an incredible uptick during this crisis. And to wrap up some quick hits from the past week, I’m going to share this bit of data every week from Crunchbase talking about the deals that have been done in the last week. So in the last week, 241 funding rounds led to 21 point $1 billion in investment and 54 acquisitions occurred for one point $5 billion. Hey, Atlanta based stored acquired Cove logistics. Now they have warehouse and transportation operations. It’s a great model. If you have a distributed customer base, this one’s interesting Viveiros systems, it gets a two point $2 million C round investment. The reason that’s interesting is because a C round would usually be much, much larger than that, but listen to who’s involved shell ventures, Austin ventures, Chevron, and live Oak partners.
Greg White (10:15):
So clearly they’re doing something good for the oil and gas industry. They’re in London slam core, a UK based company, developing spatial AI algorithms for robots and drones secured 5 million in funding, manufacturing, distribution, and retail robotics provider geek plus closed a $200 million series C led by V fund red view and Vertex ventures. Interestingly, that fund had essentially two closes, as I understand it in the final quarter of 2019. And then again in 2000 2009 solutions raises $100 million from KKR, the Dallas, Texas space, IBP and sales and operations planning solution provider is valued at over a billion dollars. And by request from Dillon Toine who asked about some of our thoughts on Kanaxis, let me start with a little bit of news. They beefed up their retail and AI power with purchase of Rubikloud a retail pricing technology also based in Canada for $60 million. And it’s worth note that connects a stock is up 96.5% in 2020.
Greg White (11:29):
So not knowing precisely what it is Dylan would like to hear about. I’m going to take two angles before I take the first angle. I want to be clear that I am no stock market analyst. Any opinions are my own, and this is a passing glance view, but here’s what I do see from their numbers. They are highly valued compared to their own historic metrics and their market peers. There’s no real surprise. They’re compared to peers because supply chain tech has been laggard for decades for me to really get excited about their stock value. I’d need to see pretty stellar sales growth. And for them to maintain the high margins to keep up the stock price can access is a high flyer in sales, product and earnings though. And their sales growth has been strong and earnings did increase 2018 to 2019. Even though sales growth grew at a pretty high rate, which is usually fairly, fairly costly.
Greg White (12:26):
Their margins are on par for a SAS or a cloud platform solution at about 70%. And the company’s performance continues to climb in both of those areas. I can’t say that their capability, their momentum, their market presence, and potential will continue to be reflected in their stock price. But I do believe can access will continue to be a force to be reckoned with in supply chain tech for some years to come. All right, that’s all you need to know about supply chain tech for this week. Hey, give me some feedback and let me know how to tune the show. One thing I’m contemplating is a supply chain tech stock index. Let me know what you think about that. Art as we wrap up, I want to remind you do not forget to get to supply chain now, radio.com for more supply chain now, series interviews and events.
Greg White (13:19):
And on Monday, don’t forget to get your buzz on. We do a LinkedIn live stream with the top supply chain news for the week, every Monday at noon Eastern time with Scott Luton and me listen to what you need to know about supply chain news for the week. Keep an eye out also for two new pilot series. I’m excited about these and Alvidrez on transportation and tech talk. Yes, like the app with the great care in bursa and me for a deep dive on supply chain tech and particular technologies and applications and problems that are being addressed in tech. Keep yours open for that one. Hey, look, if you’re listening and you haven’t subscribed commit already, would you subscribe wherever you get your podcasts? Thanks for spending time with me and remember acknowledge reality, but never be bound by it.
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