supplypikea supply chain SaaS company, raised $25 million in Series B funding to continue developing software to help consumer products companies and brands meet retailer needs and deliver products more efficiently and on time.
That supply chain management market is expected to reach $19.3 billion by 2028, after being estimated at about $10 billion in 2020. The global pandemic has led to a series of events over the past two years, including a shift in consumer behavior that has made the supply chain highly unpredictable, SupplyPike co-founder and CEO TJ Sangam told TechCrunch.
“People started consuming certain goods more than services, so demand for products shot through the roof as consumption was super high,” he said in a recent interview. “This created volatility as CPG brands and retailers were unable to predict what demand would be. All their models are based on historical trends and it’s like a very different landscape than it was a few years ago.”
This in turn led to stiffer competition between retailers to ensure products were always available to customers at the lowest possible prices. The only way to achieve this, according to Sangam, was to impose restrictions on suppliers to keep up with demand.
Retailers like Walmart and Amazon can impose about 200 different rules on suppliers, for example, to deliver in a certain time slot with a certain type of pallet and label.
Failure to comply could result in stockouts, fines, deductions and chargebacks, and lost sales, he said. Additionally, all of those fines, penalties, and lost sales can eat up anywhere from 5% to 20% of a CPG’s bottom line, he said.
“Not understanding the supply chain can create too much friction because there are many sub-optimal supply chains,” Sangam added. “The fundamental problem is that the product is not in the right place at the right time or in the right quantity when the customer wants to buy it. SupplyPike helps with that.”
In an effort to return some of that bottom line, SupplyPike goes in and finds all the rules, documents them, turns the rules into software, and applies machine learning to contextualize the data. With all the rules in place at the time of shipment, a consumer goods manufacturer’s existing processes can be streamlined by up to 80%, according to the company.
Noro-Moseley Partners and Frontier Growth have made Series B investments in the four-year-old company, and investors from there will join SupplyPike’s board of directors, which includes existing Blumberg Capital investors. The company has total funding of $40 million to date.
The new capital requirement was driven by the company’s growth over the past two years, which has ranged from no customers and no revenue to nearly 400 customers and an average 2X annual revenue growth. Working with brands big and small, including Hanes, Johnson & Johnson, Exploding Kittens and Lola, SupplyPike drives approximately $25 billion in retail sales and manages over $500 million in retail inefficiencies.
Sangam intends to use the new funds to product develop its algorithms to identify and self-fix costly supply chain problems and accelerate time to market. In addition, the company plans to create more than 60 positions in engineering, product, sales, design, marketing and customer success.
With Ships clog ports and trucks are becoming scarce, Elizabeth Stephens, director at Noro-Moseley Partners, said the supply chain space is “a great opportunity for innovation”. She is one of the investors joining the SupplyPike board of directors.
“The pandemic has really increased the problems and how outdated the systems are,” Stephens said in an interview. “I met TJ earlier this year and thought SupplyPike was a really interesting company and what they are solving is a very time consuming and expensive problem for customers. Then there is this tremendous opportunity for them to really change the landscape of supply chain visibility.”
SupplyPike’s supply chain software helps CPG brands get products to stores on time – TechCrunch Source link SupplyPike’s supply chain software helps CPG brands get products to stores on time – TechCrunch