Supply chain tech investment in Q3 fell away, says PitchBook

Report from investment analyst PitchBook shows that tough market has spooked 'supply chain tech investors who were writing the large checks'

During Q3 2023, venture capital (VC) activity in supply chain technology decreased, a report from leading investments analyst firm PitchBook shows.

The volume of deals fell by 16% quarter-on-quarter (QoQ), while deal value decreased by 27.%. Compared with the year-ago figure the deal count was down by 36% and deal value by 51%. 

Across supply chain segments, last-mile delivery suffered the largest drop-off in QoQ value (72%). Warehousing technology, meanwhile, saw the smallest decline (14%).

The Supply Chain Tech Report also reveals that the only area to buck this trend was freight tech, with a 29% QoQ increase in deals.

PitchBook Emerging Technology Senior Analyst Jonathan Geurkink says the findings suggest “some of the investors writing the large checks funding venture-growth-stage deals have become much more cautious in the current environment”. 

The report includes a case study of Sea Machines Robotics, a company that develops and markets an array of sensors, software, and systems to enable ‘just-in-time arrival’, by measuring speed and environmental factors such as wind, current, and swells. The global market for autonomous ships is estimated at just over $8.0 billion in 2023. 

Sea Machines, headquartered in Boston and with offices in Germany and Denmark, raised $34.6mn, with Investors including Toyota Ventures. Its technologies and solutions are shaped by EU and International Maritime Organisation (IMO) mandates to reduce carbon dioxide emissions in shipping. 

Its autonomous navigation and control systems can significantly reduce fuel use to help fleet operators reduce costs and meet increasingly stringent environmental regulations. 

Autonomous shipping tech helping net zero push 

Sea Machines has worked with the American Bureau of Shipping to develop guidelines and verification for autonomous marine systems. 

“A number of large shipping and engineering firms are developing and adopting autonomous marine systems,” says the report. “Sea Machines has partnered and collaborated with Rolls-Royce, HamiltonJet, and Maersk, among others, to develop and deploy systems.” 

Notable deals mentioned in the report include

  • (July) Drone tech firm Verity raises $44.1 million in a late-stage VC deal, which leads to a pre-money valuation of $136.8 million. The deal is led by A.P. Møller Holding and includes investors such as Airbus Ventures, Sony Innovation Fund, and Qualcomm Ventures
  • (July) DeepSea, which makes performance routing software to optimise maritime fuel use and minimise carbon emissions, is acquired by Nabtesco for $54.9 million.
  • (July) Silo raises $32mn in a late-stage VC deal and secures $100mn in capital to support its new supply chain financing arm, bringing its total raised to date to $209.5 million. The deal is led by Koch Disruptive Technologies and First-Citizens Bank & Trust. 
  • (August) Tradeshift raises $70mn in a late-stage VC deal led by HSBC Holdings. Instacart (also referred to as Maplebear) goes public, raising $660mn. The offering values the company at $7.9 billion.
  • (September) Kodiak Robotics raises $75mn in an early-stage VC deal led by Aliya Capital Partners. The startup has raised $198mn to date.
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