The Age of Logistics Startups is Well Underway

This is no longer a new phenomenon. But what will become clear in 2017 is just how large this wave will be. And the telling sign of how big it will be is the amount of venture capital and private equity funding poised to enter the market.

So far, we’ve largely seen seed stage funding rounds for the most interesting tech startups out there. But there is a lot of untapped investment waiting to be unleashed on the right technologies. The fact that Uber and Amazon are so committed to the freight space will only expedite those investments, as equity sources seek to capitalize on a hot market.

The issue to watch here is just how much money comes pouring into new and unique service providers in the space.

Let’s review just a small sample the conversations we’ve tracked about logistics startups in the past 60 days:

  • project44 named one of Chicago’s hottest startups to watch in 2017.
Chicago’s tech star is burning bright. The industry is churning out plenty of new launches, attracting talent from across the country and keeping the scene funded with active local investors. For Built in Chicago’s annual top 50 startups to watch list, they looked at companies founded within the last five years that are poised to usher in a new era of innovation, creativity and success.
  • CB insights reveals its top 150+ logistics startups attacking the supply chain.
Supply chain and logistics startups have seen funding go up significantly over the past few years as the category gains momentum. Smart money VCs and corporate venture arms are both participating in the space, and full-year run-rate projections estimate over $5B will be invested across 315 deals in 2016, representing annual highs for both deals and dollars.
  • project44 highlighted as one of Chicago’s top Big Data investments made in 2016.
Chicago startups and tech companies raised more than $1.7 billion in 2016, down slightly from 2015’s record-breaking $1.72 billion, following a nationwide cooldown in funding activity. The city has also continued to cement its position as a leader in Big Data, with 15 companies raising a total of $95 million.

As wise old heads in the industry have pointed out, the fact that VC and PE firms are interested in logistics and ready to invest is a good thing. It means that money will push innovation and efficiency, bringing long-needed evolutions to an industry that has clung for dear life to the past.

All that money and the smart minds that those firms are investing in can’t help but eventually push the industry into exciting new directions.