• ITVI.USA
    12,852.430
    -2,866.880
    -18.2%
  • OTLT.USA
    3.393
    0.113
    3.4%
  • OTRI.USA
    19.380
    -0.050
    -0.3%
  • OTVI.USA
    12,829.790
    -2,880.510
    -18.3%
  • TSTOPVRPM.ATLPHL
    2.580
    -0.120
    -4.4%
  • TSTOPVRPM.CHIATL
    3.550
    0.030
    0.9%
  • TSTOPVRPM.DALLAX
    1.300
    0.010
    0.8%
  • TSTOPVRPM.LAXDAL
    3.710
    0.060
    1.6%
  • TSTOPVRPM.PHLCHI
    2.140
    -0.010
    -0.5%
  • TSTOPVRPM.LAXSEA
    4.100
    -0.100
    -2.4%
  • WAIT.USA
    136.000
    -3.000
    -2.2%
  • ITVI.USA
    12,852.430
    -2,866.880
    -18.2%
  • OTLT.USA
    3.393
    0.113
    3.4%
  • OTRI.USA
    19.380
    -0.050
    -0.3%
  • OTVI.USA
    12,829.790
    -2,880.510
    -18.3%
  • TSTOPVRPM.ATLPHL
    2.580
    -0.120
    -4.4%
  • TSTOPVRPM.CHIATL
    3.550
    0.030
    0.9%
  • TSTOPVRPM.DALLAX
    1.300
    0.010
    0.8%
  • TSTOPVRPM.LAXDAL
    3.710
    0.060
    1.6%
  • TSTOPVRPM.PHLCHI
    2.140
    -0.010
    -0.5%
  • TSTOPVRPM.LAXSEA
    4.100
    -0.100
    -2.4%
  • WAIT.USA
    136.000
    -3.000
    -2.2%
Driver issuesFinanceFreightWaves LIVE: Events PodcastLast MileNewsStartupsTruckload

Pandemic to accelerate VC investment in logistics (with video)

Head of SGE’s supply chain practice says during FreightWaves’ FreightTech Venture Summit that small bites will be key to successful venture capital deals

The COVID-19 pandemic will accelerate a decade-long trend of supply chain efficiency advancements that have already drawn large sums of venture capital (VC) and private equity into the segment, Ben Weinberg, managing director of Susquehanna Growth Equity and the head of the firm’s supply chain practice, said Wednesday during the FreightWaves FreightTech Venture Summit.

The deals most likely to be done will be the ones that offer simple solutions to a business environment that has grown more complicated since the pandemic hit the U.S. in March, Weinberg told David Dolan, managing director of DC Advisory US, in a virtual interview. For example, motor carriers are trying to balance the need for IT investment with all the issues currently coming at them from all sides. Business models that help carriers with this difficult juggling act will gain marketplace traction and potentially draw VC money, Weinberg said.

A successful plan “doesn’t need to involve voice-activated AI technology” in order to succeed in the trucking world, Weinberg said.

Weinberg and Dolan agreed that the trajectory of VC spending in transport, freight and logistics is at “the meat-and-potatoes stage,” meaning there is a long runway ahead as more solutions emerge that remove the friction caused by industry fragmentation.  

Both executives urged venture capitalists to take small bites, noting that relatively narrow niches can create enormous value in proportion to the investment required. There is also a compounding effect to small investments, as a market segment initially valued at relatively low levels grows exponentially as new solutions grow from the initial investment.

For example, an IT model that facilitates a migration from spreadsheets, email and phone calls can compound value for a company as it realizes how much additional enterprise-wide functionality it can realize from such a modest start, Weinberg said.

In particular, Weinberg said that he has been “blown away” by the advancements in last-mile technologies that didn’t even exist a few years ago.

Mark Solomon

Formerly the Executive Editor at DC Velocity, Mark Solomon joined FreightWaves as Managing Editor of Freight Markets. Solomon began his journalistic career in 1982 at Traffic World magazine, ran his own public relations firm (Media Based Solutions) from 1994 to 2008, and has been at DC Velocity since then. Over the course of his career, Solomon has covered nearly the whole gamut of the transportation and logistics industry, including trucking, railroads, maritime, 3PLs, and regulatory issues. Solomon witnessed and narrated the rise of Amazon and XPO Logistics and the shift of the U.S. Postal Service from a mail-focused service to parcel, as well as the exponential, e-commerce-driven growth of warehouse square footage and omnichannel fulfillment.

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