Venture Investors Bet AI Can Improve Supply-Chain Management Logistics could serve as an early test case for how AI can reshape a sector By Marc Vartabedian Follow Sept. 8, 2023 6:00 am ET Eclipse, a venture firm focused on industrial technology, has backed startups developing logistics tech with AI applications including Reliable Robotics, which focuses on autonomous cargo aviation. Artificial intelligence isnt new to the logistics world. For years, companies have used the technology to reshape operations. Now, venture-capital investors are betting the overhaul has just begun. Venture investors are writing checks to start-upsleveraging AI for a host of emerging supply- chain applications such as predictive analytics and industrial safety. The data-heavy nature of logistics makes it ripe for an AI remake, investors and entrepreneurs say, and the sector might serve as an early test case for how AI can reshape an industry. I think AI can be such a great place to take all of these varying data sources, structure it and then drive predictable and accurate analytics that really get to the end goal of when is my cargo going to get to me, what time and what items are going to arrive, said Kaitlyn Glancy, a partner at Eclipse, a venture firm focused on industrial technology. Kaitlyn Glancy is a partner at Eclipse and focuses on supply-chain tech. PHOTO: JOSEPH SEIF Eclipse has backed startups developing logistics tech with AI applications including Reliable Robotics, which focuses on autonomous cargo aviation; Cheetah, which is developing demand forecasting and inventory prediction for restaurants; and Voxel, which leverages computer vision AI to monitor and score industrial safety in logistics and manufacturing environments. AI could provide a host of benefits such as helping logistics companies cut costs by reducing timing inefficiencies, enabling retailers to avoid supply crunches, and allowing consumers to have better visibility of when goods will arrive. Recent advancements in AI, such as conversational AI tools like OpenAIs ChatGPT, could benefit companies. Third-party logistics providers and freight forwarders could boost productivity by using ChatGPT-like tools to optimize scheduling, planning and pricing, Jonathan Geurkink, senior analyst for mobility tech and supply-chain tech at analytics firm PitchBook Data, said in a recent note. Supply-chain startups saw a huge infusion of capital during the Covid-19 pandemic as venture investing boomed and the global supply-chain crisis gave these startups the chance to offer potential solutions. Funding for global logistics startups jumped 75% to $62 billion from 2020 to 2021, according to PitchBook. While it has slowed significantly since, the 2021 capital has provided a healthy runway for many of these companies. One deal announced in May highlights the role that AI could play in the sector. Pando offers an AI software platform to help companies automate their logistics processes. The software allow.

1. Venture Investors Bet AI Can Improve Supply-Chain Management
Logistics could serve as an early test case for how AI can reshape a sector
By
Marc Vartabedian
Follow
Sept. 8, 2023 6:00 am ET
Eclipse, a venture firm focused on industrial technology, has backed startups developing logistics
tech with AI applications including Reliable Robotics, which focuses on autonomous cargo
aviation. Artificial intelligence isnt new to the logistics world. For years, companies have used
the technology to reshape operations. Now, venture-capital investors are betting the overhaul
has just begun.
Venture investors are writing checks to start-upsleveraging AI for a host of emerging supply-
chain applications such as predictive analytics and industrial safety. The data-heavy nature of
logistics makes it ripe for an AI remake, investors and entrepreneurs say, and the sector might
serve as an early test case for how AI can reshape an industry.
I think AI can be such a great place to take all of these varying data sources, structure it and then
drive predictable and accurate analytics that really get to the end goal of when is my cargo going
to get to me, what time and what items are going to arrive, said Kaitlyn Glancy, a partner at
Eclipse, a venture firm focused on industrial technology.
Kaitlyn Glancy is a partner at Eclipse and focuses on supply-chain tech. PHOTO: JOSEPH SEIF
Eclipse has backed startups developing logistics tech with AI applications including Reliable
Robotics, which focuses on autonomous cargo aviation; Cheetah, which is developing demand
forecasting and inventory prediction for restaurants; and Voxel, which leverages computer vision
AI to monitor and score industrial safety in logistics and manufacturing environments.
AI could provide a host of benefits such as helping logistics companies cut costs by reducing
timing inefficiencies, enabling retailers to avoid supply crunches, and allowing consumers to
have better visibility of when goods will arrive.
Recent advancements in AI, such as conversational AI tools like OpenAIs ChatGPT, could
benefit companies. Third-party logistics providers and freight forwarders could boost
productivity by using ChatGPT-like tools to optimize scheduling, planning and pricing, Jonathan
Geurkink, senior analyst for mobility tech and supply-chain tech at analytics firm PitchBook
Data, said in a recent note.
Supply-chain startups saw a huge infusion of capital during the Covid-19 pandemic as venture

2. investing boomed and the global supply-chain crisis gave these startups the chance to offer
potential solutions. Funding for global logistics startups jumped 75% to $62 billion from 2020 to
2021, according to PitchBook. While it has slowed significantly since, the 2021 capital has
provided a healthy runway for many of these companies.
One deal announced in May highlights the role that AI could play in the sector. Pando offers an
AI software platform to help companies automate their logistics processes. The software allows
companies to take the fire hose of data that they manage and apply AI to sync it all together in
various ways. The AI can essentially tell companies how to run their logistics differently to boost
efficiency and revenue while cutting costs.
Pando raised a $30 million Series B round led by Iron Pillar and Uncorrelated Ventures.
Most of this sectors current crop of startups havent hit public markets. San Francisco-based
Flexport, one of the older companies leading the charge in this space, was founded in 2013 and
reached an $8 billion valuation last year. Project44, another leader in the sector, was founded in
2014 and was valued at $2.7 billion last year.
Changed Landscape
AI has ushered in new possibilities for the supply-chain industry, said Jake Medwell, a partner
and co-founder at 8VC, an Austin, Texas-based venture firm focusing on logistics tech.
One thing that we ask ourselves in venture capital constantly is, Whats possible now that wasnt
possible four or five years ago? Medwell said.
In July, 8VC co-led a $17 million seed funding round into Terminal Industries, an Austin-based
startup developing an AI-based logistics yard management platform. 8VC co-led the deal with
Prologis Ventures, the venture arm of logistics real-estate company Prologis.
The AI that Terminal Industries can leverage these days has allowed it to offer more
interconnected management capabilities than what was previously possible, Medwell said.
For venture capitalist Santosh Sankar, change has come in the type of startup pitches he is
receiving. Sankar is the co-founder and managing partner of Dynamo Ventures, a seed-stage firm
focusing on supply-chain startups.
In prior years, most of the supply-chain startups that Sankar reviewed incorporated elements of
artificial intelligence to improve their products. Nowadays, AI is core. Two out of the three new
investments his firm has made this year have significant AI capabilities, which is higher than in
past years.
Youre seeing this throughout our portfolio where there are re-prioritizations of [companies] road
maps where management believes we can deliver on the customer promise and we can do so
faster or cheaper if we advance this implementation of AI, Sankar said.
Due Diligence
Investors say that the supply-chain tech sectors growth has placed new emphasis on due

3. diligence processes. They say they are fielding more pitches from startups that have branded
themselves as AI companies but are only incorporating small elements of the technology into
their product.
Eclipse partner Aidan Madigan-Curtis is interested in supply-chain startups that incorporate AI
technology.
As a result, investors are training a close eye on differentiating hype from substance.
Sankar said the rush of interest in AI and that it is particularly well-suited to logistics have led to
pitches that lean on similar technology.
The thing that we are very much pressure testing is, in your application of AI, where is your
advantage? Sankar said.
Eclipse partner Aidan Madigan-Curtis takes the time to review and ask questions about the
technology.
Im always very curious when founders begin to answer questions like, How have you trained
your models? How do they really work? Whats the size of your data set? Where did you get
access to that data, Madigan-Curtis said.
Discussion Questions:
1. How has artificial intelligence (AI) begun to reshape the logistics and supply chain industry,
and what potential benefits does it offer to companies, retailers, and consumers?
2. What factors have contributed to the recent surge in investment in supply chain startups
leveraging AI? How has this investment affected the development and growth of these
companies?
3. In what specific ways are startups incorporating AI into their logistics solutions, and what
industries or sectors are they primarily targeting? Can you provide examples of innovative AI
applications mentioned in the article?
4. The article mentions the importance of due diligence in evaluating startups that claim to
leverage AI. What criteria should investors use to differentiate between companies genuinely
utilizing AI and those merely using it as a buzzword?