Logistics Technology

Logistics Technology + Impact of Distributed / Collaborative Models

Patrick Montague

June 2015

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Transportation & Logistics IT Spend

Supply Chain & Logistics TechWHY IT MATTERS: INDUSTRY IT SPENDING TRENDS

Source: Gartner

2013 $9.75B2014 10.50 2015 11.282016 12.062017 12.942018 13.88

CAGR: +7.3%% Budget: 2.8% (below avg.)

Base Case: Low Penetration + High Potential Cost Savings = Strong Growth

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Supply Chain & Logistics TechWHY IT MATTERS: “UNBUNDLING FEDEX”

Upside Case: Complete Disruption of Existing, Inefficient System

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Investment Activity

Source: CB Insights1. https://www.cbinsights.com/blog/tech-industry-exits/

Supply Chain & Logistics TechWHY IT MATTERS: INVESTMENT AND EXIT MOMENTUM

Exit Activity

2014 # Deals: 1012014 $ Invested: $366.7MYoY Growth (by #): +166%YoY Growth (by $): +31%

2014 # Deals: 142010 # Deals:

52010-2014 CAGR: +46%Median Time to Exit: 6 yrs.Exit Growth Industry Rank:1 #8

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AGENDA

The Logistics Technology Landscape

Collaborative Consumption Meets Logistics

Investment Opportunities

Sources and References

PRESENTATION OVERVIEW

Business Model Innovations

Susceptible Verticals

Collaborative Consumption Plays

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AGENDA








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$Full Stack /

Collapsing the Value Chain

Smart Phonesin Pockets

On-Demand ServicesOffer Flexible Workto Underemployed

Logistics Comes Online

IoT / Wearables& Ubiquitous Connectivity

Logistics Tech LandscapeDRIVERS OF INNOVATION

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Logistics Tech LandscapeMARKET MAP

Local Delivery(Misc.)

Local Delivery(Food) Transportation

Travel & Hospitality

Moving &Storage

Long DistanceDelivery

Customer Segments

Enterprise

SMB

Consumer

Revenue Models

Subscription (B2B: SaaS)

On-Demand Service Fee

Software Licensing

Distribution Models

Bottom Up / Self-Serve

API / Resellers

MOBILE

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Logistics Tech LandscapeAREAS OF INNOVATION AND OPPORTUNITY




Moving &Storage


Customer Segments

Enterprise

SMB

Consumer

Revenue Models

Subscription (SaaS B2B)

On Demand Service Fee

Software Licensing

Distribution Models

Bottom Up / Self-Serve

API / Resellers

MOBILE

Too Crowded

BigWinners

Too Costly

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AGENDA








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Collaborative Consumption & LogisticsWHAT AND WHY NOW?

Traditional Supply Chain & Logistics

Asset Heavy: Idling Capacity:

Collaborative or crowd-based models use technology to create increased access to abundant and underutilized traditional logistics

infrastructure, including warehouses, vehicle fleets, fuel, and employees.

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Collaborative Consumption & LogisticsWHAT AND WHY NOW?

MILLIENNIALS ACCESS Over Ownership

Source: Goldman Sachshttp://www.goldmansachs.com/our-thinking/outlook/millennials/index.html

“25 years from now, car sharing will be the norm, and car ownership an anomaly.” - Jeremy Rifkin, The Third Industrial Revolution

http://www.goldmansachs.com/our-thinking/outlook/millennials/index.html



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Collaborative Consumption & LogisticsGROCERY CASE: WEBVAN (1.0) VS INSTACART (2.0)

Asset Heavy Asset Light

Source: Wall Street Journalhttp://www.wsj.com/articles/rebuilding-historys-biggest-dot-come-bust-1421111794

42%

62%

0%

2%

67%

1.5x

IC / WV

http://www.wsj.com/articles/rebuilding-historys-biggest-dot-come-bust-1421111794

http://www.wsj.com/articles/rebuilding-historys-biggest-dot-come-bust-1421111794

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AGENDA








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Local Delivery (Misc.) Category Landscape

• US Market Size: $96B1

• Participants: 26 (Capterra)

• Platform Plays: Amazon Prime, Google Express, UberRush, DHL MyWays

• Up-and-Comers / Novel Approaches: Hello Alfred ($12.5M raised, SV Angel, Spark, NEA, Sherpa, Crunchfund)

Doorman (ND, 500 Startups) Magic ($12M; Sequoia, YC) Postmates ($58M; Spark, Crosslink, SoftTech)

• Summary: Last mile issues remain for platform leaders. Opportunity to better serve both consumer and enterprise customers.

Potential Fit: Parcel

• HQ: Brooklyn, NY

• Founded: 2013

• Funds raised: $1M (Archangel, David Cohen, Galvanize, Great Oaks, Liberty City Ventures)

• FTE: 5 (LinkedIn)

• Key Exec: Jesse Kaplan, Co-founder/CEO

Description: Off-hours, last mile delivery service for online shoppers.

Local Delivery (misc.) Susceptible Verticals

Source: IBIS Worldhttp://www.ibisworld.com/industry/default.aspx?indid=1950

http://www.ibisworld.com/industry/default.aspx?indid=1950



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Local Delivery (Misc.)


Potential Fit: Pillow Homes, Inc.

• HQ: San Francisco, CA

• Founded: 2014

• Funds raised: $2.65M (Boost VC, Homebrew, Peak Ventures, Sherpa Ventures)


• Key Exec: Sean Conway, Co-founder/CEO

Description: Automated booking platform based on predicted occupancy and pricing dynamics.


Category Landscape



• Platform Plays: AirBnB, Home Away (VRBO) HotelTonight

• Up-and-Comers / Novel Approaches: Couchsurfing ($22.6M; Benchmark, Omidyar, General Catalyst, Menlo Ventures) OneFineStay ($15.9M; PROfounders, Index, Canaan) Room 77 ($44M; Felicis, General Catalyst, Sutter Hill, Expedia)

• Summary: Next generation platforms largely established, leaving room for middleware and/or service layer products.

Source: IBIS Worldhttp://www.ibisworld.com/industry/default.aspx?indid=2002



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Moving & Storage

Potential Fit: Moveline

• HQ: Las Vegas, NV

• Founded: 2012

• Funds raised: $4.8M (ff VC, Quotidian, Box Group, TechStars, Tony Hsieh)


• Key Exec: Frederick Cook, Founder/CEO

Description: Marketplace for finding and comparing moving services with price quotes.


Category Landscape



• Platform Plays: U-Haul Marketplace, UberCargo

• Up-and-Comers / Novel Approaches: Bellhops ($7.8M, Lowercase, GreatOaks,YC) Boxbee ($7.3M, 500 SU, Floodgate, Google) Buddytruk ($580k; Angels) Makespace ($10.1M; Lowercase, Primary, O’Reilly AlphaTech, Slow, Upfront)

• Summary: Smaller market but establishment cos. are decades behind on IT spend; emergence of dominant, tech-enabled platform not yet visible.

Source: IBIS Worldhttp://www.ibisworld.com/industry/default.aspx?indid=1351 and http://www.ibisworld.com/industry/default.aspx?indid=1154





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Potential Fit: Managed by Q

• HQ: New York, NY

• Founded: 2013

• Funds raised: $2.4M (Homebrew, RRE, Slow Ventures, Dave Morin, Scott Belsky)


• Key Exec: Dan Teran, Co-founder

Description: On-demand office cleaning and operations services via iPad.

Customer SegmentationSMB / ‘CONSUMERIZATION’

Biz Model Innovation

Category Landscape

• Explanation: Internet and smart phone ubiquity enables traditional enterprise SaaS products to be developed as lower cost, consumer-like solutions.

• Leaders: DropBox (biz intel), InfusionSoft (mkting automation), Shopify (commerce/POS)

• Risers/Novel Approaches: Breather ($7.5M; RRE, Vayner/RSE, Dave McClure) DoorDash ($59.7M; KPCB, Khosla, Sequoia) Freight Farms ($4.9M; Spark, Launch Capital, Rothenberg Ventures, TechStars) Roadie ($10M; UPS, Tomorrow Ventures)

• Summary: Especially viable in fragmented markets (local delivery, professional services).

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Potential Fit: Transfix

• HQ: New York, NY

• Founded: 2013

• Funds raised: $2.0M (Bowery, Lerer Hippeau, Founder Collective, Deep Fork)


• Key Exec: Drew McElroy, Co-Founder & CEO

Description: Mobile & web platform matching shippers, drivers for interstate freight shipping.

RevenueON-DEMAND / SERVICE FEE


Category Landscape

• Explanation: Transaction fees for instantly-gratifying, ‘delightful’ experiences generate more loyal, locked-in customers than do more traditional recurring revenue strategies.

• Leaders: Google Express, Handy, Instacart, Magic, Postmates, TaskRabbit

• Risers/Novel Approaches: Cargomatic ($10.6M; Sherpa Ventures, SV Angel, Winklevoss Capital)

Onfleet ($2.3M; MENA Ventures, StartX) Shyp ($62M; KPCB, Homebrew, Sherpa) Union Station ($1.6M; a16z, Index, D. Tisch, _Joanne Wilson) -- fka Little Borrowed Dress

• Summary: Applicable in wide-range of horizontals, verticals but LT efficacy unknown.

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Potential Fit: TransportAPI

• HQ: London, UK

• Founded: 2011

• Funds raised: ND (UK Government)


• Key Exec: Jonathan Roper, Co-founder/CEO

Description: Aggregates transport data into restful API. 600 developer clients, including Heathrow Airport, IKEA, Toothpick (on demand dental)

DistributionAPI / RESELLERS


Category Landscape

• Explanation: Logistics data/algorithms are key value driver for on-demand services, powered quickly by horizontal/API-based solutions.

• Leaders: DHL Integrated Shipping Solutions, Google Maps, Stripe, Twilio

• Risers/Novel Approaches: Layer ($22.0M; Salesforce, Homebrew, Greycroft, e.ventures, SV Angel) Mapbox ($10.6M;Foundry, Knight Foundation) Shippo ($2.3M; 500 Startups, Slow Ventures, Softtech, Joanne Wilson) ShipHawk ($6M; Soma Capital, Rothenberg Ventures, Wavemaker Parners, DN Capital)

• Summary: Intersection of two massive macro trends: ‘on-demand economy’ and ‘API-ification’

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Collaborative ConsumptionWAYS TO PLAY




Moving &Storage


Point-to-point services abound but what about

public transpo-like routes?

Chariot ($3.0M; SoftTech,

YC, Maven)

Collaborate & Consume

Local carrierswith unutilized

capacity; room for open, real-time

network…

Cargomatic ($10.6M; SV Angel, Sherpa Ventures)

Niche, but still large, segments largely unclaimed (i.e. weddings)…

Union Station ($1.6M; a16z,

Index, D. Tisch)

Massive capacity exists but few tools

enable users to directly interface with infrastructure

Roadie ($10M; UPS,

Tomorrow Ventures)

Enough demand for

“ridesharing for your things?”

Bellhops ($7.8M; Lowercase,

Great Oaks)

Consumer-facing wars underway but will new behaviors affect the supply

chain?

Freight Farms ($4.9M; Spark

Capital, Launch Capital, Techstars)

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AGENDA








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SOURCES & REFERENCESWORKS CITED

Sources

AngelList

Australian Financial Review

Business Insider

Capterra

CB Insights

CrunchBase

Gartner

Goldman Sachs

IBIS World

Logistics Management

ProgrammableWeb

Wall Street Journal

Blogs and Presentations

Entrepreneurs and Academics

Rachel Botsman; Founder, Collaborative LabCollaborative Logistics: Ripe for Disruption

Manfred Bortenschlager; Director of API, 3SCALEUnseen Enablers of Platforms

Venture Capitalists

Mike Brown; Partner, Bowery CapitalOpportunities in Vertical Software

Vic Singh; Partner, Homebrew VenturesThe Bottom Up Economy

Steve Schlafman; Principal, RREOn Demand Everything

Zak SchwartzmanThe Vertical API Opportunity

http://www.collaborativeconsumption.com/2014/10/08/collaborative-logistics-ripe-for-disruption/

http://pages.3scale.net/unseen-enablers-of-platforms-wb.html?utm_campaign=blog&utm_content=enablers&utm_source=blog

https://www.slideshare.net/fullscreen/browmich/bowery-capital-opportunities-in-vertical-software-v10/3

http://homebrewvc.tumblr.com/post/55694279731/hello-from-homebrew

http://www.slideshare.net/schlaf/on-demand-everything

https://medium.com/@zschwarz/the-vertical-api-opportunity-42a4935db985

https://medium.com/@zschwarz/the-vertical-api-opportunity-42a4935db985

Logistics Technology

Technology

transportation logistics

underemployed logistics

supply chain logistics

investment activity

yoy growth

exit growth industry

crowdbased models

strong growth