Venture capitalists and private equity firms are investing in supply chain innovation to shape the future of the industry. They are placing bets in areas like last mile delivery and omni-channel fulfillment to address trends in online retail, as well as investments in supply chain resiliency, visibility, optimization and analytics to cope with issues like risk management and sustainability. Specific technologies attracting funding include those focused on real-time execution, supply chain planning and platform development.

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

2. 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.

3. Agenda
•Introductions
•Defining the investor market
•Macro trends shaping investor thinking
•Where are the supply chain bets being placed?
•Q&A

4. 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

5. 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

6. 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

7. 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

8. 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)

9. 2017 UK
economy online 15%
5 year online growth in
Western Europe
5 year online growth 83%
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

10. 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 …

11. 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
Millions
Impact of Aging Population on Transportation
Industry Growth 36%
Retirements
37%
Non-voluntary Departures 16%
Voluntary
Non-retirement
Departures
11%

12. 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
%

13. 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.

14. 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

15. 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

16. 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