June 2022

Meet the Team #5 – Daniel, Investment Analyst

Daniel Granados is an Investment Analyst at F-LOG Ventures. He brings experience in venture capital and M&A to the team. Read on to find out why he is the perfect addition to the F-LOG Ventures team and which LogTech trend fascinates him the most.

What was your journey into the world of venture capital?

After finishing my bachelor's degree in Economics at the University of Bonn, I was given the opportunity to put many startups to the test in the software team of High-Tech Gründerfonds for a bit more than a year. Then, following my master's degree in St. Andrews (Scotland), I spent almost two years in M&A consulting, where I handled the supply chain issues in a number of transactions before returning to the venture capital industry in March 2022. Now at F-LOG, I am following the developments in the LogTech sector and discovering the future disruptors of the supply chain.

What excites you about working in venture capital?

The technology we use today looks nothing like it did only ten years ago. Working in venture capital means embracing the new, helping to transform existing industries, and to create new ones. In this sense, there are no limits to creativity and innovative thinking, which makes me feel positive about what future entrepreneurs bring to the table.

And why F-LOG Ventures?

F-LOG is seeking the champions of tomorrow while combining the "old" and "new" economy by trying to solve today’s pressing issues: The digitalization of the logistics industry and the advancement of exciting technologies. The team of F-LOG has the privilege to not only act as an independent VC but also to have the operational experience and network from our investor FIEGE to give logistics startups the perfect support. This is a positive “unfair advantage” which adds value to what F-LOG gives to entrepreneurs.

In your opinion, what is the hottest topic in logistics at the moment?

There is incredible potential for LogTech business models of startups serving the sustainability efforts of retailers and consumers. In addition, there are business models in the circular economy and reverse logistics which are still rather undeveloped compared to the already huge and growing e-commerce market, yet will become more and more relevant in the near future due to growing pressure from users. I am therefore particularly looking forward to such technologies.

What is your most important lesson learned in venture capital so far?

The short answer is: don't decide immediately.

When you are presented with a topic or analyze new business models, it is advisable not to listen to your first instinct, as it can often deceive you. It has been proven that prejudice or stereotypes are some of the many biases that influence our decision-making ability. Especially when dealing with the unknown, we often are biased because we feel we have already figured out everything there is to know about a topic, or because we have heard of other similar solutions that did or did not make it, or because we just follow trends.

Such traps are part of our everyday life and therefore it is especially advisable to constantly question ourselves in order to really discover the most exciting and disrupting innovations. This is the only way you will discover pioneers.

May 2022

F-LOG’s Industry Perspective #4: Rethinking sustainable logistics – the green transformation ahead of us?

Sustainability has been an omnipresent topic not just since recently – so how could we not address it in terms of logistics and venture capital scene developments?

We’re all aware of the fact that the sustainable way of doing business has become more important in recent years. Resources are scarce, consumer behavior is changing towards a more eco-friendly product or service choice, technologies are evolving extremely fast, and political regulations are tightening because of e.g., specific emission targets in the Paris Climate Agreement. Our society is demanding a green transformation and businesses have to deliver. They are adjusting their strategies or even developing new business models to meet their customers’ needs and reduce their ecological impact – especially in the logistics sector.

Startups with the goal of making our markets more sustainable are becoming increasingly interesting for venture capitalists although this trend is nothing new in the VC scene. Cleantech startups using clean technologies to fight the climate crisis or preserve resources, for example, were already booming in the early 2000s. However, their often hardware-heavy approaches could not be scaled sufficiently, and their long-term product development was very unclear, making investors hesitant about investing big.

Since then, two major developments have emerged. Firstly, the mindset of investors has broadened - a development also driven by funding and investors wanting to follow ESG (environmental, social, and corporate governance) criteria, thereby focusing on ethical actions. Secondly and more importantly, the mindset of high potentials has evolved towards the ambition for their business actions to have an impact. While in the early 2000s, a corporate lifestyle at investment banks or consulting firms was the ultimate goal, today, many high potentials are per se increasingly motivated to found their own company and thus have a significant say in the strategic direction and the value culture of their startup. The desire to have a positive impact adds up to this and encourages more founders.

From our perspective, this is the best thing that could have happened. In the past, a major disadvantage of sustainable companies was that they had the stigma of failing to reach their purpose. With the tremendous talent that the sustainability sector has gained over the past years and the commercial development that has come with it, the sector is ready for big investments and to create an enormous impact. From a logistics perspective, we identify several business models and fields of application that address the circular economy:

Reducing CO2 emissions

This is probably the most obvious claim. At F-LOG, we are seeing an increasing number of companies targeting the global CO2 emission problem and seeking funding. This especially concerns modes of transport for goods and commodities, including the entire field of e-mobility. Electric commercial vehicles like trucks, but also electric ships and planes have slowly been developing over the past few years due to the zero-emission target of all transport by 2050 under the Paris Climate Accord. In Europe, Volvo is one of the market leaders in e-trucks but only sold 346 units in 2021. So far, no European country has managed to actually utilize e-trucks in numbers above a three-figure rate - with Switzerland and its 77 e-trucks in operation leading the way. Germany ranks fifth with 37 purely battery-driven electric trucks. One of the biggest challenges remains for the battery capacity to handle routes of more than 200 km and the associated time needed to recharge during which the truck cannot be driven. This leads to increased transport costs and results in productivity losses in the single good sold. Shifting perspective to the last mile, many (lately well-funded) startups try to address sustainable deliveries by concentrating on transport modes like cargo bikes or vans (e.g., Liefergrün, GetHenry, or Packfleet) or autonomous robots. Starship, for example, secured US$ 100m in two rounds within 30 days both executed at the beginning of this year. This investment enables them to expand their autonomous delivery services to North American and European cities. For more information on the last mile, check out our city logistics blog.

In addition to transportation, developments at management software level are also apparent. Especially tools helping corporates with emission tracking and ESG compliance are gaining traction. Solutions throughout the entire supply chain are already simplifying and supporting the individual decision-making process on the reduction of CO2 emissions. Companies like the French startup Sweep (US$ 100m funding), Persefoni from the US (US$ 118 m), or Berlin-based PlanA (US$ 13m) already received substantial funding despite being relatively new to the market, which shows investors’ growing interest in business models tackling sustainability solutions.

Waste reduction

Another field being progressively disrupted in terms of sustainability is waste reduction. And just as the recycling process itself, the ecosystem involving startups addressing the waste management sector is a circular one: there are startups that try to convince the customer to change their behavior toward a more sustainable and conscious consumption – then there are those with tools to manage the already generated overproduction (e.g., Misfit) – and those that aim to reduce or to avoid waste all together (e.g., PlasticEnergy).

A specific use case of waste reduction is the packaging of goods. According to the Cradle2Cradle (C2C) concept which recycles raw materials to be fully reused, sustainable packaging should be recyclable or biodegradable. The packaging includes all materials used to send an order as well as transport packaging such as pallets, covers, transport cages, and shrink film. Regulated by the German Packaging Act, which was introduced in 2019, companies that bring packaging into circulation are also responsible for taking it back and sorting it, as well as documenting details of how it is/can be recycled. This and the mandatory registration of packaging solutions, among other things, will be tightened by July 1, 2022. Alternative concepts range from reusable packaging such as heavy-duty boxes or pallets to different combinations of materials that are easy to recycle or have themselves been recycled (e.g., paper, cardboard, or carton). Exemplary startups include London-based Notpla receiving more than US$ 13m in December 2021 or the mature US startup Temper Pack raising a Series D of US$ 140m in March 2022. Rather young is Woola, which is providing sheep wool-based compostable packaging solutions.

Efficient use of warehouse space

Lastly, an essential role is played by where and how goods are stored with the goal of reducing unused space. As the prices for logistics spaces continue to rise, discussions often revolve around whether existing space can and should be used in both warehouses and other storage facilities, or whether new real property should be built. It certainly does not need to be emphasized here that the former option is probably the more sustainable one. However, a trend is seen here toward investments in new buildings regardless of the segment. Alternatives to new spaces are, for example, options like on-demand warehousing and mini hubs in urban areas. On-demand warehousing offers the opportunity to flexibly store and digitally manage goods while sharing spaces with several parties when not in use. Advantages include, e.g., filling fluctuating warehouse occupancy, shorter last-mile transport routes as well as shorter or more precise delivery times. Another concept that, for example, SpaceFill offers is to use the platform’s economy to make available space visible, and easy and fast to rent out. The French company secured US$ 25m recently in a Series B led by NGP Capital and Maersk Growth.

Sustainability is here to stay and that’s a good thing. This blog adds value to discussions about current developments in the logistics sector. A lot is happening in terms of transportation, warehousing, and the materials used, showing just how diverse sustainability can be.

Our final words of wisdom:

It’s never the businesses alone that make the change. It’s us. The consumers. Our daily decisions set the course!

March 2022

Meet the Team #4 — Tanja, Managing Partner

Another team member of F-LOG Ventures is Tanja, our Managing Partner. As always, below you’ll find some interesting questions Tanja answered for us.

Tell us about your professional journey so far.

I came across venture capital by chance during my trainee program at the start of my career. Immediately excited, I went directly into VC. That’s why I’ve been on the investor’s side for quite a long time, and I still have a lot of fun working with founders and startups.

What excites you about working in venture capital?

Venture capital is all about new business models, people, problems, developments and challenges day in, day out. Things never work out the way you imagined, they always change and you have to react to them. This is what I like best — you never get bored. Sometimes things go well, sometimes not, but the cooperation between the founders, the team and the investors is always important. When you reach your common goal with the startups, it’s a great feeling.

What do you look at when investing in startups?

For me, in addition to the business idea, the team is super important. Ultimately, it is the founders and the core team that make a business model succeed. However, we as investors need to have a good assessment of the situation, which also requires a lot of experience and gut instincts. The teams naturally present themselves at their best during pitches and want to convince investors of their merits. For us, it is crucial to understand how the teams function internally and how they communicate in critical situations with their investors.

Other than that, the past development of the company, the KPIs, the technology, the customers, etc. are of course necessary for us. They give us a good picture and validate the team’s assumptions about the market, other investors and also customers.

Why did you join F-LOG Ventures?

I had the opportunity to set up F-LOG Ventures from the very beginning which I found very exciting, especially since I had already set up another fund. A lot of heart and soul always goes into this and you feel like a startup yourself, which is also good for an investor.

I consider F-LOG’s focus on the extended field of logistics to be an essential USP to enable us to really support our portfolio companies beyond money only. With the know-how, market insight and network that F-LOG can offer here, we see ourselves as a partner for startups in the logistics sector and this is what sets us apart from many other VCs.

In your opinion, what is the hottest topic in logistics at the moment?

There is a lot of movement in the logistics sector. COVID-19, in particular, has strengthened this trend. As F-LOG, we are currently looking at a number of topics that we consider to be extremely interesting. This includes supply chain resilience. Current supply chain problems, e.g., as seen in the automotive industry, show how important and fragile the supply chain still is. Here, many startups are rethinking existing processes and using innovative approaches to solve the problems. We see that the demand for new logistics solutions will continue to grow.

Are there any learnings from your professional life which you value in your private life, too?

Always be yourself and be confident in what you are doing, whether it is going well or not.

Are there any tips you would like to share with entrepreneurs looking for funding?
  1. Prepare well for an interview. Rehearse beforehand, maybe even get tips from experienced founders. The network is huge and helpful in this area.
  2. Show yourself as you are. Give your opinion without letting yourself be taken away from it because you are afraid to tell the investor something they don’t want to hear.
  3. Approach the situation as if you want to convince yourself as your biggest critic.
  4. Be open to new directions if the investor is the right match.

March 2022

Meet the Team #3— Michael, Investment Manager

Who else is behind F-LOG? To give you a better idea of the team we prepared some questions for each of them. Next up: Michael.

What does working in Venture Capital mean to you?

First and foremost, to me, it means always questioning your beliefs, every day. In the VC market, you work on issues that often go 100% against existing industry logic. That is super exciting! You get to work a lot with the latest technologies and great founders! The work is very meaningful because you help these founders build something very big and valuable, solve problems, and create jobs.

What was your most important lesson learnt in Venture Capital so far?

My job consists to a large extent of asking questions and listening. Coming from a professional role where I was more used to having to give answers, this was new to me at first. But I love listening to founders, asking the right questions, understanding their true motivation, and learning together with them.

What was your journey into the world of Venture Capital?

My professional background is in logistics. I spent three years driving strategic projects and strategy development in the Corporate Development department of our investor FIEGE, gaining very deep insights into logistics market segments and customer pain points therein. When F-LOG Ventures was founded, it was clear to me that I wanted to become part of this team. My network in the industry helps me a lot today to evaluate new business models and to really help the founders of our portfolio companies. My academic background is more broadly in business administration. I studied in Germany, England, and Indonesia.

What makes a great Venture Capitalist?

Short answer: Everything that comes after the funds have been transferred.

What is your favorite topic in LogTech at the moment?

It is difficult to choose just one. A challenge that moves me enormously is the digitalization of the small logistics players. Many business models are limited to corporates with strong purchasing power as customers. On the other hand, there are many lightweights in logistics which together make up at least 90% of the market. The European industrial space is highly fragmented. We see a huge potential in digital and technology-based standard tools for these small logistics players who will be the first to suffer from the shortage of skilled workers and are all the more dependent on digitalizing and automating their logistics and information processes.

Do you see any specific challenges that founders of LogTech startups are facing more than in other domains?

Most of the teams we work with need a very strong understanding of B2B processes that have developed over a long time, differ widely from one supply chain to another and rely on an outdated IT infrastructure. Incorporating new digital products into or building on top of these environments is not always an easy task. Having the right sales and onboarding process in place is therefore highly important. Otherwise, there is a risk of sales cycles becoming too long. From my perspective, this aspect is even more dominant in the logistics and supply chain domain than in other B2B domains, such as HR or accounting.

What can you learn for your everyday personal life?

Aim towards a higher goal that others think is unachievable. Then, find the right supporters and prove the critics wrong.

March 2022

F-LOG invests in Saabrücken-based deep-tech startup natif.ai in a 5 million Euro Seed round

natif.ai, a Saarbrücken-based startup, offers an automatic and self-learning text recognition system. The startup is seizing the huge market opportunity of intelligent document processing. Led by a strong team of founders who contribute their outstanding expertise from the field of AI, F-LOG decided to invest. natif.ai secured a seed investment of 5 million euros.

The founders of natif.ai: Johannes Korves, Christophe Hocquet, Manuel Zapp, and Bérenger Laurent

Saarbrücken, 09 March 2022 - natif.ai secured funding of 5 million euros in a Seed round. Next to the existing Pre-Seed investors 468 Capital, the High-Tech Gründerfonds (HTGF), and Premius, F-LOG Ventures invested alongside the early-stage investor Redalpine leading this round, and business angel Phillipp Rechberg.

Even today, sending, signing, and reconciling documents make up a significant part of everyday business across industries. In logistics, specifically, this may include delivery bills, inventory lists, invoices, etc. The deep-tech startup natif.ai helps to tackle inefficiencies in document processing and handling as it focuses on intelligent document process automation (IDP).

natif.ai uses high-performance AI models and deep-OCR developed in-house to serve its customers with the ability to analyze a large variety of documents extremely fast and efficiently. In detail, this means that documents can be processed 30-60 times faster with an automation rate up to 10 times higher compared to commonly-used technologies. The startup operates the platform which enables its customers to conveniently set up document-related workflows using natif's workflow engine. Additionally, the platform integrates customer workflows into existing processes with ease, attracting businesses from different industries. The technology is ready for immediate use and complies with all European data protection regulations.

The latest investment round will enable natif.ai to further invest in the growth of its company. The startup is already in the process of growing its team and is looking to bring additional developers and sales experts on board. In order to keep up with competitors in the long term, the company will be expanding internationally. Especially when it comes to entering new markets, F-LOG, with its international network and know-how in logistics and supply chain management, will actively support the startup.

The F-LOG team is proud to join Johannes, Christophe, Bérenger, and Manuel on their journey to becoming the leading IDP platform.

January 2022

Smartlane secures 6-million-euro funding to push their transport intelligence software

Smartlane, an F-LOG Ventures’ portfolio company since early 2021, has secured blueworld.group as a new investor on their way to developing the number one transport intelligence software. Additionally, they secured grants from the European Innovation Council. Their transport optimization and analytics engine with fully-automated transport planning and industry-specific process mining capabilities improves logistics companies' efficiency, reliability, and transparency.

The Smartlane founders Mathias Baur, Monja Mühling and Florian Schimandl

Munich, 11 January 2022 - Our portfolio company Smartlane recently secured 6 million euros in funding. Following an intense competition, they won a total of 1.7 million euros in support funds from the European Innovation Council (EIC). In addition, they successfully closed a Series A financing of more than 4.5 million euros, backed by F-LOG Ventures and other investors like Freigeist and the new investor JOVA Direkt Invest GmbH, an investment vehicle of the blueworld.group.

Smartlane offers an AI-based SaaS solution that optimizes and automates the dispatching and transportation planning for road haulage. Their software analyzes over 250 planning parameters, thereby saving up to 90% of the time spent on dispatching which at the same time reduces the CO2 footprint of freight forwarders and logistics companies. Since 2015, the team has achieved outstanding progress both in terms of product maturity and business development. In addition to refining their AI, they have achieved €360,000 in savings per customer location per year.

Smartlane’s solution is in response to the rapidly changing transportation market. The general cargo market, which is currently Smartlane’s focus segment, is growing exponentially, not least due to a rise in order volumes during the pandemic - a situation that has become even more critical due to a shortage of drivers and dispatchers. Also, the growing awareness of green, sustainable logistics shows once again that a cloud-based AI solution that aims to optimize logistical operations is essential to saving resources and ensuring operational excellence.

We therefore welcome the new investor to the club of motivated investors ready to support Smartlane on its way to the number one transport intelligence software. The investment will enable Smartlane to significantly grow its team and write the next chapters of its success story.

November 2021

F-LOG´s Industry Perspective #3: City logistics and why it will remain a hot topic

For many e-commerce firms it has always been essential to be close to big cities and metropolitan areas. With the goal of wanting to improve logistics within the city, more startups and investors are expected to reallocate capital to urban logistics and decentralized fulfillment solutions.

But is city logistics really that special? Yes, it is!

Why? Last mile delivery, especially within inner cities, is the most inefficient step of the entire supply chain, 61% of surveyed logistics companies say. This is also because it is the most expensive part of the supply chain, taking up a 53% share in the shipping costs. So, let’s talk city logistics.

By definition, city logistics refers to the distribution of freight in urban areas. With demand growing for both a service economy and life in urban areas, cities are challenged to provide more frequent and customized deliveries. More specifically, urban goods movements utilize around 20% to 30% of kilometers driven in the metropolitan area.

City logistics is a playing field that differs strongly from other areas — especially when it comes to logistics. Looking at supply chains, logistics mostly takes place in surroundings that are specifically created for the handling, storage, and transportation of goods. These surroundings are designed by logistics experts. As soon as logistics enters the city, this is no longer the case. In fact, logistical requirements are often neglected in urban planning.

And why is it such a complex concept?
  • Software requirements: The city is the place where outdated B2B logistics software will meet the highest UX-related expectations of consumers. Studies show that 56% of consumers would not buy a brand again if they were not satisfied with the shipping service. This state-of-the-art customer experience can only be achieved when the software used by last mile logistics providers and retailers allows a smooth and steady communication with the recipient. As the systems used to date are technologically outdated in most cases, the key enabler of such experiences is missing.
  • Process flexibility: Additionally, it is important to remember that the consumers developed more personalized and flexible service requirements throughout the last years. The delivery should be as convenient as possible, such as, for example, having the possibility to choose a specific time window for delivery of the order even though the parcel is already on its way. This complicates the processes for the company while the technology behind such processes becomes even more relevant.
  • The number of powerful stakeholders: Inner-city logistics constraints are being defined at all levels. Not only by the European Commission, whose low emission zone policy is becoming more and more stringent, but also the cities themselves restrict the access of transport vehicles.
  • The high density and diversity of competitors: Borders between CEP giants, food delivery services and innovative last-mile service providers are increasingly blurred (as can be seen when looking at Delivery Hero’s Germany come-back in the quick commerce market) as core competencies widely overlap.
  • Hardware-related requirements: Scooters would struggle to deliver furniture, but neither are more trucks a solution either. Last-mile robots and drones are not only facing physical challenges posed by curbsides, lampposts, and cables, but also legal frameworks. For this reason, the most practical application of UAVs and other robots is still in the pilot phase.
Major VC investments in city logistics

A small tour of the more recent venture capital (VC) history in city logistics shows us that a lot has happened. Makers of semi and fully autonomous last-mile vehicles (e.g., Starship, Nuro) from all over the world receive billions in funding every year. Restaurant delivery startups like Takeaway became grown-ups a decade ago already. Those who deliver food and consumables instantly from their own micro warehouses — known as flash supermarkets — are the latest VC hype with hundreds of millions in VC funding for Gorillas, Flink, and others in only a few months. Both Gorillas and Flink were founded in Berlin at the end of 2020 and since have raised US$1.3 billion and US$304.2 million in total respectively. And even if we look at mobility as logistics’ partner in crime, micro mobility such as ride hailing, scooter and unmanned aerial vehicle (UAV) startups, e.g. drones, have been VC targets for a long time.

Despite all this funding, we are convinced that in Europe, city logistics has yet to live up to its full potential!

… and why it will remain a hot topic

From our point of view, some “white spots” in the urban area that are ready to be revolutionized include:

  • Delivery service orchestrators: Who will find the solution that succeeds in reducing the number of vehicles of different service providers that cover the same routes every day? Pilots such as the Berlin KoMoDo project, in which Germany’s key CEP service providers (DHL, DPD, GLS, Hermes and UPS) collaborate by sharing city hubs, show the great potential of a joint effort. However, the digital concept breaking the established industry logic is still missing.
  • Micro hub network operators: Who will succeed in decentralizing fulfillment infrastructures in a way that brings the new standard of instant and highly flexible delivery to product groups other than food? Initial investments by VCs indicate the new wave. However, the winning business model is yet to be found. Will it be the B2B service provider with innovative last-mile infrastructures and services — the “Gorillas for non-food retailers” — building a proprietary B2C marketplace brand? Or someone else?
  • Retail connectors: Who will convincingly connect local retailers with the last mile for them to run a true omnichannel business? Are ship-from-store startups scalable? And do they offer potentially strong margins?
  • Returns champions: Who will design the desperately awaited solution that takes the pain out of collecting, processing, and redistributing e-commerce returns in an environmentally friendly, convenient, and efficient way? Can business models that became huge in the U.S. succeed in Europe too?
  • Crowd enablers: There should be ways to involve the crowd in last mile logistics. What is common across all Asian and South American regions has yet to take off in many European countries.

When talking about new LogTech business models, cities are the melting pot for cutting-edge technology-, hardware-, and consumer-driven requirements in logistics. These requirements are key to innovative concepts coming up in the future. VCs should be prepared and keep an eye on city logistics.

September 2021

F-LOG´s Industry Perspective #2: Supply chain resilience on the urge

According to a McKinsey Research Paper, 93% of global supply chain leaders are planning to increase resilience along the supply chain. Accelerated by the current pandemic, it is a trend no manager should be missing out on, regardless of size, location, or industry of their company. That’s why we, too, took a closer look at the biggest drivers, problems, opportunities, and startups in this field.

One key tool to increase resilience is visibility within the supply chain: It refers to the exchange and availability of information and data within and between companies as well as between companies and stakeholders. A significant aspect of this approach involves tracking and tracing of the supply chain and the decision who to share this information with. Thereby, managers can identify critical paths in the supply chain and work on solutions or financial and operational buffers. Other advantages include enhanced availability, flexibility, and more control of the supply chain as well as strengthened risk management and improved transparency. Properly applied, supply chain visibility leads to supply chain resilience which can result in a competitive advantage.

Covid-19 key driver for increased awareness of this topic

Huge bottlenecks and chaotic developments in nearly every supply chain worldwide because of COVID-related shortages and/or outages shed a light on the importance of keeping track of the product journey from the very start to end-use. But there are also other interesting aspects supporting this trend:

  • The number of companies using assistance in supply chain mapping doubled from 22.5% in 2019 to 40.6% in 2021. More than half of the organizations (57.6%) reported that COVID-19 was the reason for investing in supply chain visibility solutions.
  • Supply chain disruptions like the pandemic, natural disasters, or cyber-attacks are very costly. McKinsey calculates that companies can lose 42% of a year’s EBITDA over a period of ten years.
  • If we take a closer look, the percentage of organizations experiencing 10 or more disruptions in supply chain transactions has risen from 4.8% in 2019 to 27.8% in 2020, which reflects an increase by over 20%.
  • Trends such as customer awareness and aspects of sustainability are also main drivers of supply chain visibility.
  • But also, RFID, cellular devices, and services, as well as sensors, are becoming more ubiquitous. According to The Business Continuity Institute, about 55.6% of organizations are already using technology to assist them with analyzing and reporting supply chain disruptions.

All these aspects taken together demonstrate the increased awareness and urgency to bring more visibility into the supply chain.

Startups are challenging the status quo

The startup sphere applies different approaches and technologies to achieve visibility. From what we have noticed, they specifically use IoT sensors, blockchain and RFID technology for certain use cases. IoT sensors´ prices went from $1.30 in 2004 down to $0.44 in 2018, which makes them an interesting potential investment. But especially supply chain visibility platforms with a more general approach like Project44, FourKites, e2Log and Shippeo recently raised stunning funding rounds.

  • Project44 raised nearly $400m with the biggest investor being Goldman Sachs and Emergence. The scale-up offers a visibility platform for shippers and third-party logistics firms. They connect, automate, and provide visibility into key transportation processes to accelerate insights and shorten the time it takes to turn those insights into actions.
  • FourKites secured funding of more than $200m with Bain Capital Ventures and Qualcomm Ventures as the most recent investors. FourKites is a supply chain visibility platform designed for transportation into yards, warehouses, and stores.
  • Shippeo reached nearly $70m in capital with Nordic Ventures as one of the funders. Shippeo is a supply chain visibility platform that provides shippers instant access to predictive information of all deliveries.

These examples underline the relevance of venture capital for this industry to grow further, but also the importance of this topic in general.

There are many challenges along the way to real resilience

Although supply chain visibility seems to be the focus of many, there are still quite a few major and minor challenges to be addressed. Especially the absence of technological readiness of many infrastructures and incomplete or low-quality data fail to support, or rather complicate this development.

Also, supply chain operations still lack adequate planning while the different connections are missing cohesion. Information in most organizations tends to be confined to the respective departments. The sales department has its own projections and budget, production has its own schedules, and buyers have supplier costs and delivery schedule data. This data fragmentation serves the purpose of the individual departments within an organization rather than the bigger picture — in this case: the entire supply chain. Additionally, each supplier and customer have their own information which they usually do not share with other supply chain partners at all. Everyone lives in their own bubble with their very own information with just little or no interconnection with the other partners.

Looking at this trend, interconnectedness is key and thus must be the goal. Since costs related to the supply chain are believed to account for 30% — 80% of sales, amalgamating the data of all departments is crucial for success.

What can we take from this?

Although total supply chain visibility exists in theory, in practice, companies must use the right visibility application to find the right level of transparency for the right use case in order to receive a real value from it.

Departments need to collaborate rather than go it alone, to create proper and useful supply chain visibility. However, the biggest challenge remains that most of the existing data is tracked elsewhere. If data were gathered and patterns identified, the supply chain could be better understood, leading to adequate visibility and understanding of the whole process.

The topic is very interesting for venture capitalists since there is a large number of startups trying to get a foothold into the supply chain visibility market. Compared to the situation a few years ago when software for this endeavor was not mature enough, startups nowadays have figured out how to manage and use it properly. And since everybody experienced the shortages of supply chains firsthand during the COVID-19 pandemic, many entrepreneurs are setting up a supply chain visibility startup — sometimes to great success, like Project44.

The industry is fully aware of the importance of supply chain resilience, and investors and decision-makers are hence ready to invest in proper solutions.F-LOG VENTURES

News and updates related to F-LOG Ventures, LogTech and Venture Capital.

August 2021

Meet the Team #2 — Tim, Managing Partner

As already communicated, we would like to show you who´s behind F-LOG. To give you a better idea of the team we prepared some questions for each of them. Let us introduce to you: Tim!

Tim holds a Master of Science from the Mercator School of Management. While studying, he founded a food business which he sold in 2015. Following his exit, his focus moved to the world of venture capital, which led him to the VC branch of NRW.BANK, where he managed investments into digitalisation and technology before joining F-Log Ventures.
Tell us about your professional journey so far.

During my business administration studies, I founded a company in the food sector with a friend. We were able to quickly achieve initial success and grow. After the exit and graduation, I switched to the investor side, which always interested me a lot during my startup days. I have now been working in venture capital since 2014 and still passionately look for outstanding tech entrepreneurs.

What excites you about working in venture capital?

Without sounding pathetic, I have always found it interesting that venture capital is somewhat futurological. In our line of work, we try to find companies that come up with highly innovative products but have not yet acquired a relevant market share. So we try to gage if their product developments will be used by big companies or end customers in the next years which are not aware of their existence at that time. The fact that the people behind the companies often have an incredible amount of fire in them and regularly inspire me again is like the cherry on the cake.

What do you look at when investing in startups?

We try to obtain as much information as possible for our analyses. Special focal topics include, for example, team, market, growth, and exit potential. But I am convinced that you need a certain spirit in the team to be able to work together for many hours (with many ups and downs) toward the success of a young company. When you visit a company in the capacity of the potential investor, you are always in an exceptional situation. The team is prepared and wants to present itself from its best side. That’s why I try to pay special attention to certain subtleties, which can sometimes seem very mundane. For example, how respectfully the founders and team members treat each other. It is also quite revealing if people hold the door open for each other, or whether colleagues are poured a glass of water at lunch.

Why did you join F-LOG Ventures?

I believe that the European venture capital market still has some catching up to do in terms of supporting its portfolio. We want to set a new benchmark with F-LOG in the logistics sector and become the relevant LOG-Tech investor through our industry-specific know-how and understanding of the industry, but above all our network.

In your opinion, what is the hottest topic in logistics at the moment?

This is actually not an easy question, as there is an incredible amount happening in logistics right now. But we are currently looking with great interest into companies that are dealing with sustainability. You can literally see how the topic is growing as a focal point with end customers (and thus also with companies that supply these customers). Political pressure will also grow in the coming years. Companies that fail to pay attention to this will really feel the heat. I think there are quite a lot of low hanging fruits here, especially in logistics, which have extremely large market potential.

Are there any learnings from your professional life which you value in your private life, too?

Don’t time the market!

There is a time for everything and sometimes there is no point in rushing things. No matter how much you would like to make these things happen.

Are there any tips you would like to share with entrepreneurs looking for funding?

Do not take the search for capital lightly. Prepare for meetings with potential investors as best as you can, have your documents on point, and be ready to give a plausible answer to any question (especially the hard ones). Nothing is more off-putting than an unprofessional founding team. Remember: You never get a second chance to make a good first impression!

July 2021

F-LOG´s Industry Perspective #1: How warehouses become smart

This is the first article of our new blog series, F-LOG´s Industry Perspectives, which we want to use to irregularly share our view and industry insights on some of the hottest topics in the LogTech space. We start with an overview of the current situation of robotics in intralogistics.

Again and again, we have encountered business models and technologies around the topic of smart warehousing and robotics in intralogistics in the past months. We took this as an occasion to dig a little deeper into intralogistics use-cases for robotics and how they drive the trend of smart warehousing.

Macro-level trends as a key driver for more automation

Demand for more automation in intralogistics is rising because the ever-growing e-commerce sector is transforming order structures and buying habits of consumers. Consumer expectations are shifting towards faster and cheaper delivery services, reinforced by Amazon’s business model of these past years.

Another important factor is the human resources problem — rising costs and a shortage of workers support the need for more automation. Especially after Covid-19, investments in robotics and automation are economically more attractive since a larger share of value creation will again take place directly in industrialized countries, where labour costs are already at a very high level.

Overall, logistics service providers have to take advantage of using robots in their warehouses to tackle these challenges, reduce operational costs and increase productivity.

Massive growth ambitions of the robotics market

The trend for more automation is also reflected in the market numbers and forecast for the next years. The robotics market is expected to grow from USD 76.6 billion in 2020 to USD 176.8 billion by 2025; that corresponds to a CAGR of 18.2%. Especially collaborative robots are expected to grow at the highest CAGR during the forecast period. Therefore, this blog article will have a closer look at the technology that takes on dangerous, repetitive and difficult jobs and which enables humans to perform their jobs with more creativity and flexibility, leading to more efficiency and productivity in the warehouse.

Three key technologies and relevant startups that enable smarter warehouses today

There are various types of robots that are used for intralogistics solutions to handle tasks such as picking and delivery, stock movement and material handling or quality inspections. In the following we will focus on three key technologies such as Autonomous Mobile Robots (AMRs), Articulated Robot Arms (ARAs), Unmanned Aerial Vehicles (UAVs) and their practical impact on daily operations today.

1. Autonomous Mobile Robots (AMR)

AMRs are used especially for materials handling and evolved from Automated Guided Vehicles (AGV). While conventional AGVs can only follow fixed paths and move to predefined points on the guided path, the vision-based system of AMRs uses touch-based sensors, onboard computers, and AI to move in dynamic warehouse environments to any accessible location. Yet, AMRs not only present a great chance to improve intralogistics processes but also a huge market opportunity. The AMR market comes with double-digit growth and more than USD 10 billion in revenue in 2023.

One practical example of AMRs that work collaboratively alongside warehouse associates is Locus Robotics, a robotic unicorn funded with over USD 250 million. Locus offers a Robots as a Service (RaaS) subscription-based program that makes it easy to add AMRs to warehouse operations and shift capital expenses for automation to operational or labour expenses.

Its AMRs act as picking assistants but contrary to other systems, the warehouse associate does not follow the robot after the pick — instead, he is directed to the closest robot nearby for more work while the initial robot moves on to the next task, often with a different associate. This process enables shorter cycle times, 2–3 times greater productivity and a 129% greater ROI.

Other well-funded AMR startups are 6 River Systems, founded in 2015 and acquired by Shopify in 2019 for USD 450 million, InVia Robotics (USD 29 million funding) or Magazino (USD 50 million funding), to name a few.

2. Articulated Robotic Arms (ARA)

ARAs have flexible joints and articulated robotic arms to move and lift items in the warehouse. They’re typically used for picking and placing packages onto racks, palletizing, loading and unloading inventory as well as sorting packages. The challenges that make these tasks extremely complex are the diversity in packaging materials, the identification of single items within a box, and the different shapes of each product or package. That’s why ARA startups are creating robots that come very close to human capabilities, both in terms of hardware and software. Most labour (up to 80%) in a warehouse is dedicated to picking and packing, and ARAs have become very efficient in performing these tasks. Today, most ARAs are used in manufacturing since the tasks are more standardized and not as complex as in intralogistics. To deliver the results described above, ARAs rely on enabling technology, which is why the right software for these robotic arms is as important as the hardware itself.

A good example of this use case is Osaro, a San Francisco-based artificial intelligence startup, funded with more than USD 60 million whose software powers practical robotics automation solutions using technology such as advanced machine learning for visual perception and easy to integrate APIs. It enables the robotic arms to adapt automatically to moderate task variations, to detect all types of objects and to deploy easily and fast. The result is a scalable solution that works accurately (successful grip rate >99.5%) with cycle times as low as 3.5 seconds, delivering higher productivity and improved supply chain resilience. Another startup that provides an ARA end-to-end solution including software and hardware for e-commerce order fulfilment is RightHand Robotics, based in the US and funded with more than USD 30 million.

3. Unmanned Aerial Vehicles (UAV)

Unmanned Aerial Vehicles, or drones, can handle tasks that other robots cannot due to gravity. Use of UAVs is increasing although they are not as widespread as the other types of robots. Their main purpose at the moment is inventory checking. However, they can also analyze safety requirements such as racking and fire hazard inspections. Since they can execute their tasks at great heights and in dangerous environments, they also increase the safety of workers. Accidents often result in serious injuries that come with serious costs and a loss in revenue. The average work-related injury results in USD 38,000 indirect expenses and USD 150,000 in indirect costs. Therefore, higher safety levels produce an economic advantage over time.

The FIEGE Group, a leading European logistics company that specializes in efficient supply chain solutions, already completed a successful trial with UAVs when automating stocktaking at one of its multi-user warehouses. doks. innovation GmbH, a German early-stage startup, provided the technology: drones equipped with a barcode scanner and a camera that process the relevant data and forward them to the Warehouse Management System as well as a connected AGV enabling flying times of up to five hours. Stocktaking at this specific warehouse with 30,000 pallet spaces would usually require considerable personnel resources. Having the drone handling the actual job all by itself, it only required three shifts and one supervisor to intervene in case of an emergency. This results in two advantages: decreased labour costs and clearly fewer staff on site, which in times of strict hygiene protocols and a risk of a COVID-19 outbreak is definitely a positive.

What can we take from this?

Robotic applications across intralogistics are definitely an important topic when it comes to process automation and improved productivity.

Logistics service providers should evaluate to what degree they can use robots to keep up with a competitive market environment and rising challenges such as labour shortages, changing customer expectations or fluctuating order structures.

The market potential is huge, and the recent decade has shown that the technology is evolving fast. Also, new business models might come up: Companies do not want to acquire automation assets anymore. Robotics as a Service could be interesting to reduce CAPEX, facilitate more flexible cost structures, and reduce one-time investments, thereby lowering the entry barrier and making technology applications more scalable.

The human workforce remains essential. Robots are there to support human workers on tasks that are dangerous, repetitive or difficult, so they are free for tasks that involve creativity or demanding decision making. Human-robot collaboration shall empower humans and robots to exploit their intrinsic strengths.

Let´s talk!

However, robotics not only present an opportunity for logistics providers but also for venture capital firms (see the startups mentioned above). Therefore, we are very happy to talk to founders that focus on making warehouses smarter and advancing automation across intralogistics. Just drop us a line on LinkedIn or send us an e-mail.

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