Logistics and supply chain analytics startup SourceDay today announced that it raised $12.5 million in venture capital financing. The bulk of the tranche will be put toward SourceDay’s go-to-market strategy, according to CEO Tom Kieley, and toward helping customers mitigate supply chain risk during the COVID-19 pandemic. To this end, SourceDay is offering its product for free for 90 days to manufacturers who might benefit from its automation capabilities.
“The hardships supply chains are feeling right now aren’t new challenges, but they’re magnified by the intensity of the COVID-19 crisis,” Kieley told VentureBeat via email. “Organizations that already embraced digital transformation will be the most resilient … On a normal day, this modernization reduces risk associated with lost revenue, inflated inventories and more. In times like these, it can be the difference between staying open and shutting doors.”
The news follows a PricewaterhouseCoopers report anticipating that companies will have to address the implications of their supply chains in regions affected by the coronavirus. For instance, they might have to secure future air transportation as supply and capacity become available, and they might have to buy ahead to procure much-needed inventory and raw materials.
SourceDay — whose customers include Dell, Napoleon, Weir, and over 6,000 other manufacturers, distributors, and suppliers — provides a platform that organizes suppliers into a unified list sortable by their best offers. It facilitates communication between procurement and supply chains with standardized pricing, quantities, and delivery dates, and it matches vendor invoices with purchase orders and receipts to ensure customers don’t overpay and take advantage of payment terms discounts.
SourceDay’s product also ships with a dashboard that makes it easier to touch base with suppliers and track incoming inspections of parts, as well as a supplier scorecard that measures real-time performance on metrics like price variance, on-time delivery, quality, and responsiveness. Moreover, leveraging the large volume of transactional data between buyers and suppliers on the platform, SourceDay applies AI and machine learning to drive risk awareness of on-time deliveries and predict risk when it comes to material availability and other factors.
Baird Capital led this latest funding round in SourceDay, with participation from existing investors Silverton Partners, ATX Ventures, and Draper Associates. It brings the startup’s total raised to $23.3 million following a $6.5 million series A round in December 2018, and it follows after a year in which SourceDay processed $66 billion total direct spend (a 1,300% year-over-year increase) and doubled the size of its team to 56 employees.
SourceDay competes with startups like Flock Freight in the global logistics space, which is anticipated to be worth $15.5 trillion by 2023. Uber offers a service called Uber Freight, to which it recently committed another $200 million as part of a major expansion. San Francisco-based startup KeepTruckin last year secured $149 million to further develop its shipment marketplace, and Next Trucking closed a $97 million investment. For its part, Convoy raised $400 million at a $2.75 billion valuation to make freight trucking more efficient.