There’s more money than ever for supply chain’s start-up stars

Photo 149317438 © motortion | Dreamstime.com

Funding for logistics and supply chain start-ups doubled last over 2020, according to this report from McKinsey, although given that the number of cash-raising rounds remained, the money is coming into start-ups in ever larger chunks.

This means that certain firms are dominating cash inflows – $2.5bn for Indonesia’s J&T Express, $1.5bn for Lalamove, another billion for Flexport – and are also beginning to deploy these war-chests in M&A: $2.8bn was spent by star-ups in the US alone in 2021 on acquisitions.

All of which is attracting increasing attention from big money private equity: “Private equity (PE) funds are also entering the arena and increasing the drive to fast and successful exits—through IPOs, for example. Analysis of the start-up sample shows that PE funding increased by 167% between 2020 and 2021, far above the overall funding increase of 95%. As more VCs exit successfully, they leave space for larger funds to invest.”