Does investing in tech start-ups have a future right now? Alarm bells are ringing in the US financial media following a 25% drop in investment in Silicon Valley to US$7.2 billion in the last quarter of 2022, putting it back at the same level as in ‘Covid year’ 2020.
Seed funding for start-ups has declined in Europe over the past six months too, albeit less dramatically than in the USA. These decreases are quite understandable, since the rise in interest rates since the start of the war in Ukraine has brought an end to cheap borrowing. Nowadays, investments need to provide a clear prospect of returns.
Based on personal experience over the past month, I have gained a very different picture of the financial situation for start-ups. Having said that, I am specifically focused on start-ups and scale-ups offering digital supply chain solutions. In two separate calls, investors from Germany and France have told me about their extremely concrete plans to launch investment funds specifically for supply chain start-ups this year. One fund will focus on pre-seed investments in very young start-ups, while the other will focus on scale-ups.
Very positive about upcoming young software vendors
Similarly, I returned from a business trip to Paris in early January feeling very positive about upcoming young software vendors with innovative supply chain solutions. For example, Wakeo not only provides real-time multimodal transportation visibility at a very detailed level worldwide, but also links to this the carbon footprint of individual shipments. Meanwhile, Colibri has developed an affordable cloud-based solution for sales & operations planning. In addition to demand planning and supply planning, this also has a strategic planning module for the simulation of new market scenarios.
And the new resilience planning module from Flowlity – the winner of our European Supply Chain Start-up Contest in 2020 – represents serious competition for major North American players such as Blue Yonder, o9 Solutions, E2Open and Kinaxis. Besides this, my own research when preparing for the sixth version of our Maturity Matrix for Supply Chain Start-ups in Europe clearly revealed numerous interesting opportunities to invest in a European ‘Silicon Valley’, including on the Seine, the Thames, the Spree, the Danube, the Rhine and the Amstel.
Martijn Lofvers, Chief Trendwatcher Supply Chain Media
martijn.lofvers@supplychainmedia.nl