CB Insights has done an analysis of the impact of the outbreak of Covid-19 private funding, which in particular impacts startups.

The bad news

Unsurprisingly, the bad news is that it is going to go down, and based on experience from previous outbreaks, especially Asia slows down with a projected drop of 35% quarter-on-quarter.

The cynics out will say: “Surely that is the good news. So much money was thrown at freight-tech startups that didn’t do anything we actually needed”. That may be true. The problem is you don’t know upfront, which ones are the ones that will succeed and fail, and having less funding makes the pipeline smaller. This isn’t going to hurt the industry now but it will in 3-4 years.

The good news for freight-tech

In this day and age, you want to get to the good news quickly, so here it is:

It isn’t dropping to 0 and the interest in supply chain visibility has gone up.

Especially the latter is critical. Retailers and manufacturing companies are rethinking their supply chains and moving towards resiliency, which requires visibility.

This comes as no surprise and there are multiple very qualified startups focusing on this, such as project44, FourKites, Arviem, ClearMetal and even NetFeasa, who is addressing the underlying infrastructure issue. If you have spent a disproportionate amount of time on LinkedIn recently, like me, you will surely have come across some of their messages as this is the time to tell everyone, what the supply industry already knows: without visibility, you can’t control your supply chain.

As an example, the first standard that DCSA brought out was a track and trace standard, and even though they may not be attacking the problem at the root, most other startups (and incumbents) will have some level of improved dashboards or automatic notifications and alerts for shipments deviating from the plans.

The bottom line

We are looking at tougher times in general, but there is still money out there and the focus on managing your supply chain just increased significantly.