cscmp 2014: follow the money

16
Follow the Money Where are investors placing their supply chain bets for the next 5 years?

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Where are investors placing their supply chain bets for the next 5 years?

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Page 1: CSCMP 2014: Follow The Money

Follow the Money

Where are investors placing their

supply chain bets for the next 5 years?

Page 2: CSCMP 2014: Follow The Money

Why Are We Here?

Venture capital, private equity, strategic investors help shape

the future of supply chain, by funding the innovation that

creates new business models and capabilities.

Page 3: CSCMP 2014: Follow The Money

Agenda

• Introductions

• Defining the investor market

• Macro trends shaping investor thinking

• Where are the supply chain bets being placed?

• Q&A

Page 4: CSCMP 2014: Follow The Money

Introductions: Dave Anderson

• Managing Director, Supply Chain Ventures (14 years)

– Angel/early stage investing

– Supply chain technology

• Notable investments: Kiva Systems, LeanLogistics

• Current investments: Llamasoft, Steelwedge, Resilinc

• Supply Chain Experience (35 years)

– Managing Partner, Supply Chain Consulting, Accenture

– Vice President, Logistics Consulting, Temple, Barker & Sloane

Page 5: CSCMP 2014: Follow The Money

Introductions: David Beatson

• CEO & Founder, Ascent Advisors, LLC – Private equity consulting and investing

– Logistics and supply chain industry

– Public Company Boards: • Descartes Systems

• PFSweb

– Private Company Boards: • Jones and Frank

• Progistics

• Supply chain experience – CEO Globalware Solutions

– CEO Panalpina, North America

– Chairman & CEO Circle International Group

– President & CEO Emery Worldwide

Page 6: CSCMP 2014: Follow The Money

Investors: Different Stage, Different Focus

• Venture Capital

– Angel/Early & Mid Stage companies looking for growth capital

– Focus: Acquisition & IPO

– Investing Horizon: 1 – 10 years

– Notable names: Bain Capital, CRV, Khosla, Battery Ventures

• Private Equity

– Mid-stage and mature companies that need a broader platform or

recalibration

– Focus: Market rollup (critical mass or footprint extension)

– Investing Horizon: 3 – 7 years

– Notable names: Vista Equity, Francisco Partners, Warburg Pincus,

Accel KKR, ABS Capital

Page 7: CSCMP 2014: Follow The Money

Investors: Different Stage, Different Focus

• Strategic – technology “platform” companies

– Mid-stage & mature companies that need a broader platform or have

distribution & channel synergy opportunities

– Focus: Market rollup (critical mass or footprint extension)

– Investing Horizon: 5-? years

– Notable names: SAP, Oracle, Descartes, Highjump, Accenture

Page 8: CSCMP 2014: Follow The Money

Supply Chain Macro Trends

• Omni-channel retailing/home delivery

• Internet of things

• Risk management/Security

• Sustainability

• Social supply chain

• Globalization

• Outsourcing

• Consolidation (shippers and LSPs/carriers)

Page 9: CSCMP 2014: Follow The Money

2017 UK

economy online 15%

5 year online growth in

Western Europe

83% 5 year online growth

in the US

60%

5 year margin impact

from Omni-channel

retailing

-11%

2013 Holiday

Delivery Capacity

Problems

Sources: Forrester Research & LCP Consulting

Online Retailing Will Drive Logistics Market Changes

Page 10: CSCMP 2014: Follow The Money

150 Daily Smartphone Touches

2013 Mobile devices outnumber global population

1.9B Smartphones & tables sold in 2017

2B High speed broad band users in 2019

26B IoT devices in 2020

$1.9T 2020 global economic IoT value add

Sources: IDC, Super Monitoring , Mary Meeker & ABI Research

The Highly Connected World Will …

Page 11: CSCMP 2014: Follow The Money

Source: Overdrive Online

2.00

1.75

1.50

239,000 Potential shortfall

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Mill

ion

s

Impact of Aging Population on Transportation

Industry

Growth

36%

Retirements

37%

Non-voluntary

Departures

16%

Voluntary

Non-retirement

Departures

11%

Page 12: CSCMP 2014: Follow The Money

USA Truckload Trends

25,000

productivity decrease

3.1 %

Resulting from

Hours of Service

(HOS) changes

Intermodal

growth increase

through 2017

5.1 %

New drivers needed by 2022*

* Each item represents 10K drivers

Unfilled driver positions at the end of 2013

Schneider estimate

ATA ATA

Stephens, CHAIN estimate

Decrease in newer

tractors 2006-2013 19 %

ACT research

projected

increase

in 2014 rates

ATA

2017 Time

229,000

2-3 %

Page 13: CSCMP 2014: Follow The Money

Global Ocean Container Trends

Proposed general rate increase

per FEU* through April 2014

Operating Margin of

most profitable ocean carrier in 2013

TSA

5.8

Alphaliner

$600

%

Alphaliner

in total carrier

capacity in 2014 7.6 %

increase

Projected increase

in container shipping

volume in 2014

4.6% 70%

of the current market share

is covered by the three

global shipping alliances

Alphaliner

77 %

Carrier on-time

reliability in Q4 2013

Seaintel Drewry

* One forty-foot equivalent unit (FEU) equals 25 metric tons or 72 cubic meters.

Page 14: CSCMP 2014: Follow The Money

Global Air Freight Trends

annual growth

rate for the

5 years covered

by 2013-2017

Total Freight-Ton-Kilometer

(FTK)

Available

Freight-Ton-Kilometer

(AFTK) Asia-Pacific Market

share of airfreight

industry

Source: IATA

3.2%

Estimated air

freight revenues in

2014 10 %

down since 2011

$60Billion

1.4% 2.6%

40%

Number of regions with

tonnage growth

above 3% 1

2013 Growth

MIDDLE EAST

Page 15: CSCMP 2014: Follow The Money

Supply Chain Technology Investment Trends

• 5 years of platform making and consolidation

• Private equity

– New Mountain Capital - Red Prairie & JDA

– Francisco Partners – Kewill & Four Soft

– Vista Equity – Omnitracs, Roadnet Technologies & XRS

• Strategic

– SAP acquires Ariba

– Descartes acquires 26 companies in 6 years

– GT Nexus acquires TradeCard

– Trimble acquires TMW Systems & ALK Technologies

– Brambles acquires LeanLogistics

– Accenture acquires Procurian

Page 16: CSCMP 2014: Follow The Money

Where Will Supply Chain Investment Go for the Next 5+ years?

Venture Capital

• Last Mile/Omni-Channel Delivery

• Supply Chain Resiliency / Sustainability

• Visibility/Traceability

• Real-time Execution Optimization

• Buyer Sentiment / S&OP

Private Equity

• Platform development—Supply Chain Planning, Execution