Slync.io, a San Francisco technology startup, announced it had raised $11 million to grow its multiparty supply chain platform business, closing out a yearlong fundraising effort at the height of the coronavirus pandemic.
“It’s fitting with how it’s gone for it to close in this kind of climate,” co-founder and CEO Chris Kirchner told FreightWaves.
Kirchner said the round took a long time to raise even when the market was good, partly because the Slync team wanted to find the right partner and partly because of the perceived competition.
With dozens of logistics visibility solutions flooding the market, the messaging in the space is that “there’s a lot of theoretical overlap,” he said. A lot of companies that hit the market before Slync “look similar,” Kirchner explained, complicating pitches to venture capitalists.
That said, when you get into the software there really isn’t overlap, Kirchner said.
In the case of Slync, the company’s objective — “enabling action” — might, at first glance, seem difficult to pin down.
Then you get into the software.
Unlike data-as-a-service startups, Slync (the name is a simplification of Supply Link) focuses on aggregating existing sources of information into a single, easy-to-use system so customers can not only see the flow of goods across the supply chain, but also use that data to expedite actions, like exception management.
Information from legacy supply chain management systems typically focuses on single transportation modes or disjointed segments, Kirchner said, with much of the data related to shipments, purchase orders and the like residing in Outlook and Excel.
Slync’s “logistics orchestration” software connects those systems, automating workflow and business processes, then disseminating that information “in its entirety” across stakeholders and companies, Kirchner explained, allowing supply chains to function as flexible, interconnected networks — like a musical ensemble, if you will.
Drawing a distinction between visibility solutions providers like Project 44, and FourKites, Kirchner said Slync shares a customer base with these companies, with the latter providing predictive visibility and Slync integrating their data — along with information from carriers and other sources — enabling connectivity and responsiveness for shippers, carriers and other logistics providers.
With a user base across six continents — freight forwarders Kuehne + Nagel, DHL and Expeditors are among Slync.io’s customers — and on a path to profitability, the startup will use the funding round to invest in growth, “versus having to eat up current cash burn,” according to Kirchner.
The typical annual recurring revenue for a Series A company is $1.5 million to $1.7 million, he said, “but we’re double that.”
This round was led by Blumberg Capital, and as part of the deal, Managing Partner David Blumberg will join the board of directors. Correlation Ventures and existing investors like 235 Capital Partners participated in the raise.
“We signed our deal right before the market went haywire,” said Kirchner, crediting his investors for honoring the transaction throughout the turmoil.
“Crazy to watch as a spectator,” the COVID-19 outbreak is not having a material impact on Slync, although Kirchner said he expects the VC spigot is going to be shut off at least through the end of this year and that he will proceed more cautiously as a result. “I’m making sure that I’m looking at greater than 24 months of cash in the bank.”
With some customers seeing double or triple the amount of business and others completely shut down, Slync has an obligation to help where it can, and in some cases is turning off subscriptions, Kirchner said.
Expanding that collaborative spirit to the social and political sphere, he mulled the broader implications of the unprecedented viral outbreak.
“I think the good in people is starting to come out a lot. We’re starting to see more unity than there has been in a long time in this country — the idea that we’re fighting a common enemy, so let’s pull resources together and work together to defeat it.”
“Maybe that’s a silver lining to all of this, if there is such a thing.”