Supply chain management (SCM) software company Sourcemap is set to expand into Europe and, fueled with a $10 million venture capital infusion, further develop its suite of supplier benchmarking, traceability and transparency applications to meet growing demand from global businesses that increasingly face complex compliance regulations and logistics disruptions.
In addition to recent worries that the Russian invasion of Ukraine will further upset global supply chains disrupted by COVID, new labor and green-energy laws — including European regulations that require companies to map their supply chains back to the originating suppliers — have stoked demand for SCM software.
“This is the right time to meet the market or scale and that is going to require additional resources on sales, marketing, R&D and other divisions,” said Leonardo Bonanni, founder and CEO of Sourcemap.
Supply chain regulations expand
In January 2021, the US signed into law the Uyghur Forced Labor Prevention Act, which prohibits goods made in whole or in part from any materials originating from China’s Xinjiang Uyghur Autonomous Region. In addition, new regulations around decarbonization, deforestation and forced labor require major multinationals to implement technology for transparency and traceability in many aspects of global supply chain operations, Bonanni said. The new European Green Deal that targets the EU to become the first climate neutral continent by 2050 will also help open up the market for the company, he said.
Sourcemap originated as a PhD project at the MIT Media Lab in 2008 as a portal designed to educate consumers about the origin of their products and their social, green impacts.
The company, which now says it has more than 400,000 companies mapped by its software — and offers applications tailored to businesses in sectors including agriculture, beauty, healthcare and jewelry — over the years has transformed into a cloud-based platform for SCM applications.
Sourcemap modeled after social networks
The platform, modelled after social networks, allows customers to add suppliers and sub-suppliers, and invite suppliers to validate the data. The data collected by the platform is processed at the back end to provide various insights to customers.
“Sourcemap essentially provides a portal as the front face for its enterprise customers to start inviting their suppliers and in turn their suppliers — this is in tiers and can run into thousands until the actual source — to fill in key details about how and where they are sourcing their products or raw materials from,” Bonanni said.
This data helps provide services such as supply chain visibility, risk optimization and integration into workflow automation within the same window after it verifies the details that suppliers and sub-suppliers are filling in.
“Supply chain mapping often involves thousands of companies across five or more tiers of supplier relationships, so we have developed a custom graph database that allows customers to identify and register every supplier, and to collect as much data as they need to ensure that the chain of custody is clean and compliant,” Bonanni said.
“Each Sourcemap customer has a virtual private cloud to securely manage and analyze their end-to-end supply chain data, hosted on a hybrid cloud (Amazon and Microsoft) for maximum resilience and for compatibility with existing enterprise systems,” according to Bonanni.
SCM software can used to check noncompliance
Sourcemap also claims that companies can use the platform to crosscheck suppliers’ data to rule out the ones who have histories of being noncompliant in any way. Many Sourcemap customers use the data from the due diligence platform, garnered in by the front-facing portal, to check if they can meet their delivery timelines, Bonanni said.
While this puts the company in direct competition with companies such as SAP, IBM, Oracle and NetSuite — all vying for share of the SCM software market — Bonanni said that Sourcemap’s due diligence platform has API connections with SAP, Oracle, and IBM databases that very large multinationals are using already.
SCM software market grows rapidly
According to a report from Allied Market Research, the global digital supply chain market was valued at $3.91 billion in 2020, and is expected to reach $13.67 billion by 2030, growing at a CAGR (compound annual growth rate) of 13.2% from 2021 to 2030.
Bonanni claims that the ability of Sourcemap’s platform to map suppliers through multiple tiers for various materials across regions straight out of the box is the key differentiator against other SCM software vendors.
A survey conducted by SCM software provider Blue Yonder shows that at least 67% of the 250 organizations polled believe that the ability to view and manage their supply chain from end-to-end will help them better manage pandemic disruption. The survey further suggests that nearly 97% of organizations faced disruption over the last 12 months and 63% said that supply chain has become a priority.
Sourcemap said that it was offering its due diligence platform and other services via licenses that can be scaled up or down depending on the customer’s requirements, in line with other enterprise SaaS platforms.
The planned expansion into Europe is a result of $10 million infusion into the company by Energize Ventures — a VC firm that focuses on early, growth stage venture capital, and MIT’s E14 fund. In 2011, the company raised an undisclosed amount in a non-equity transaction from the MIT Media Lab and E14 fund.
