CSCMP 2014: Follow The Money
- 1. Follow the Money Where are investors placing their supply chain bets for the next 5 years?
- 2. Why Are We Here? Venture capital, private equity, strategic investors help shape the future of supply chain, by funding the innovation that creates new business models and capabilities.
- 3. Agenda •Introductions •Defining the investor market •Macro trends shaping investor thinking •Where are the supply chain bets being placed? •Q&A
- 4. Introductions: Dave Anderson •Managing Director, Supply Chain Ventures (14 years) –Angel/early stage investing –Supply chain technology •Notable investments: Kiva Systems, LeanLogistics •Current investments: Llamasoft, Steelwedge, Resilinc •Supply Chain Experience (35 years) –Managing Partner, Supply Chain Consulting, Accenture –Vice President, Logistics Consulting, Temple, Barker & Sloane
- 5. Introductions: David Beatson •CEO & Founder, Ascent Advisors, LLC –Private equity consulting and investing –Logistics and supply chain industry –Public Company Boards: •Descartes Systems •PFSweb –Private Company Boards: •Jones and Frank •Progistics •Supply chain experience –CEO Globalware Solutions –CEO Panalpina, North America –Chairman & CEO Circle International Group –President & CEO Emery Worldwide
- 6. Investors: Different Stage, Different Focus •Venture Capital –Angel/Early & Mid Stage companies looking for growth capital –Focus: Acquisition & IPO –Investing Horizon: 1 – 10 years –Notable names: Bain Capital, CRV, Khosla, Battery Ventures •Private Equity –Mid-stage and mature companies that need a broader platform or recalibration –Focus: Market rollup (critical mass or footprint extension) –Investing Horizon: 3 – 7 years –Notable names: Vista Equity, Francisco Partners, Warburg Pincus, Accel KKR, ABS Capital
- 7. Investors: Different Stage, Different Focus •Strategic – technology “platform” companies –Mid-stage & mature companies that need a broader platform or have distribution & channel synergy opportunities –Focus: Market rollup (critical mass or footprint extension) –Investing Horizon: 5-? years –Notable names: SAP, Oracle, Descartes, Highjump, Accenture
- 8. Supply Chain Macro Trends •Omni-channel retailing/home delivery •Internet of things •Risk management/Security •Sustainability •Social supply chain •Globalization •Outsourcing •Consolidation (shippers and LSPs/carriers)
- 9. 2017 UK economy online 15% 5 year online growth in Western Europe 5 year online growth 83% in the US 60% 5 year margin impact from Omni-channel retailing -11% 2013 Holiday Delivery Capacity Problems Sources: Forrester Research & LCP Consulting Online Retailing Will Drive Logistics Market Changes
- 10. 150 Daily Smartphone Touches 2013 Mobile devices outnumber global population 1.9B Smartphones & tables sold in 2017 2B High speed broad band users in 2019 26B IoT devices in 2020 $1.9T 2020 global economic IoT value add Sources: IDC, Super Monitoring , Mary Meeker & ABI Research The Highly Connected World Will …
- 11. Source: Overdrive Online 2.00 1.75 1.50 239,000 Potential shortfall 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Millions Impact of Aging Population on Transportation Industry Growth 36% Retirements 37% Non-voluntary Departures 16% Voluntary Non-retirement Departures 11%
- 12. USA Truckload Trends 25,000 productivity decrease 3.1 % Resulting from Hours of Service (HOS) changes Intermodal growth increase through 2017 5.1 % New drivers needed by 2022* * Each item represents 10K drivers Unfilled driver positions at the end of 2013 Schneider estimate ATA ATA Stephens, CHAIN estimate Decrease in newer tractors 2006-2013 19 % ACT research projected increase in 2014 rates ATA 2017 Time 229,000 2-3 %
- 13. Global Ocean Container Trends Proposed general rate increase per FEU* through April 2014 Operating Margin of most profitable ocean carrier in 2013 TSA 5.8 Alphaliner $600 % Alphaliner in total carrier capacity in 2014 7.6 % increase Projected increase in container shipping volume in 2014 4.6% 70% of the current market share is covered by the three global shipping alliances Alphaliner 77 % Carrier on-time reliability in Q4 2013 Seaintel Drewry * One forty-foot equivalent unit (FEU) equals 25 metric tons or 72 cubic meters.
- 14. Global Air Freight Trends annual growth rate for the 5 years covered by 2013-2017 Total Freight-Ton-Kilometer (FTK) Available Freight-Ton-Kilometer (AFTK) Asia-Pacific Market share of airfreight industry Source: IATA 3.2% Estimated air freight revenues in 2014 10 % down since 2011 $60Billion 1.4% 2.6% 40% Number of regions with tonnage growth above 3% 1 2013 Growth MIDDLE EAST
- 15. Supply Chain Technology Investment Trends •5 years of platform making and consolidation •Private equity –New Mountain Capital - Red Prairie & JDA –Francisco Partners – Kewill & Four Soft –Vista Equity – Omnitracs, Roadnet Technologies & XRS •Strategic –SAP acquires Ariba –Descartes acquires 26 companies in 6 years –GT Nexus acquires TradeCard –Trimble acquires TMW Systems & ALK Technologies –Brambles acquires LeanLogistics –Accenture acquires Procurian
- 16. Where Will Supply Chain Investment Go for the Next 5+ years? Venture Capital •Last Mile/Omni-Channel Delivery •Supply Chain Resiliency / Sustainability •Visibility/Traceability •Real-time Execution Optimization •Buyer Sentiment / S&OP Private Equity •Platform development—Supply Chain Planning, Execution