PE investors seeking mature supply chain tech firms
Of private equity (PE) investment, Choi says: “The approach is either to seek out mature supply chain tech companies that can be reinvigorated by capital and end-to-end transformation, or to pursue deteriorating companies within supply chain that can be made more efficient through modern technology.”
Choi says storage businesses are one of the largest areas of supply chain-related PE investment, because the growth of e-commerce is generating “incredible demand for warehouses and distribution centres.
She adds: “The bet on the growth of online retail is a bet on more and larger fulfilment centres and, by extension, on logistics services related to tracking, inventory management, and last-mile fulfilment.”
She says those e-commerce vendors who are leveraging technology to speed up delivery times and fine-manage inventory have a competitive advantage in a rapidly growing global marketplace.
Choi adds that a fragmented tech-enabled services market is presenting “many opportunities for investors to scale and consolidate attractive companies, as PE firms integrate smaller service-providers that lack the resources to invest.”
She says: “The opportunities to use technology to drive
efficiency and stability in supply chain have increased dramatically, positioning supply chain tech as a vertical ripe for growth and innovation.”
