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Pandemic Disruptions Draw Investor Attention to Supply-Chain Technology

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Pandemic Disruptions Draw Investor
		
			
		
	Attention to Supply-Chain Technology

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The coronavirus pandemic stymied private-equity deal activity across almost every sector, particularly hospitality and restaurants, but investors predict that supply-chain technology will see its fortunes rise.

“The market itself was attractive to private-equity and growth equity investors prepandemic, but now it’s even more so,” said Dave Dolan, a managing director focused on transportation, logistics and supply-chain technology at investment bank DC Advisory. “It’s a space they know well and it’s addressing a large total adjustable market size. If you’re going to [invest] capital in this environment, this checks a lot of boxes.”

The coronavirus pandemic stands to intensify investor interest in technology focused on supply-chain management and logistics, as a greater reliance on e-commerce has put more pressure on the movement of goods. Companies continue to turn to technological innovation to help them manage disruptions caused by lockdowns and social distancing, as well as the economic fallout resulting from those disruptions.

“If you think about a new normal where there are tighter margins and not as much capital expenditure to buy new trucks or equipment, software that helps you run that more efficiently is going to be a lot more relevant,” Mr. Dolan said.

Supply-chain technology companies found favor with both private-equity and venture investors long before the pandemic hit. Private-equity firms backed 26 deals in the sector totaling a little more than $6.1 billion in 2019, while venture investors pumped $10 billion into more than 296 deals, according to PitchBook Data Inc.

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