The 3 Big Deal Drivers Shaping the Supply Chain Management Market

Earlier this month, DHL Group opened its new Europe Innovation Center in Troisdorf, Germany. The flagship of a network of similar facilities dotted across the world, it serves to “identify emerging trends, engage with customers, test new technologies, and scale high-impact solutions across regions and business units”, as well as foster collaborations with other academic researchers and startups.

This move caught our attention because, as part of the announcement, DHL Group laid out the “three most important trend clusters that will shape supply chains in the coming years”, determined by its survey of over 2,500 supply chain professionals across a spectrum of industries and regions. The trends in question are AI, robotics and Environmental, Social & Governance (ESG) imperatives – all of which were recently emphasised in our newly published Supply Chain Management Software M&A Report. 

The echoing of our findings by one of the leading logistics giants underscores just how much these factors will help propel the Supply Chain Management (SCM) tech market, which as our report shows is expected to grow to USD 52bn by 2033 at a 10.7% CAGR. Let’s consider each in turn.

The societal and geopolitical tumult of recent years – from economic uncertainties to workforce shortages to regional conflicts to trade wars – has exacerbated the pressures on global supply chains, drawing attention to the utility of AI-powered SCM software. Such tools are now automating critical processes across the entire supply chain, whether in terms of continually monitoring real-time data to accurately forecast demand, simulating logistics scenarios to predict risks and mitigate disruptions, or taking care of communications between carriers and their clients.

The increasing ingenuity of agentic AI will continue to fuel investor and acquirer activity, with one typical deal this year being the USD 1.75m pre-seed funding round secured by Dublin startup Axe. It provides digital “teammates” for carriers, forwarders, brokers and vehicle fleets – in other words, AI agents which are able to make voice calls with drivers to check up on deliveries and delays, and independently handle the kind of repetitive administrative work which can take up some much employee time. 

It’s a prime example of the kind of technology which more and more supply chain companies are investing in, with the aforementioned DHL Group survey revealing that “AI was named by 44% of respondents as the most important driver for the future transformation of logistics.”

Robots have long been integral to supply chains, boosting efficiencies and minimising risks in warehouses and distribution centres. Rapid advances in both IoT hardware and SaaS platforms used to orchestrate operations are continuing to drive demand for various types of robots – these include Autonomous Mobile Robots (AMRs), which use AI and sensors to navigate facilities independently, Automatic Guided Vehicles (AGVs), which follow fixed pre-determined routes, and Goods-to-Person (GTP) robots which streamline the picking process by selecting and delivering specific items to operators. 

The sheer breadth of robotics solutions available from different manufacturers is presenting opportunities for startups specialising in robot management software. An example is Deus Robotics, a Kyiv-based company which secured USD 3m in seed funding early this year. Its platform provides a single unified interface for the management of AMRs, AGVs, GTPs and other types of robots from multiple manufacturers.

This vendor-agnostic model allows warehouses to smoothly implement and integrate different robots as they see fit, and the company has also developed AI software which can enhance the route navigation, obstacle detection and battery charging capabilities of the robots.

Our SCM M&A report pays special attention to sustainability as a key supply chain concern. It notes that, while there has been ideological pushback against ESG by the current US administration, and while the EU’s full-scale implementation of its new Corporate Sustainability Reporting Directive has been delayed, it’s nevertheless the case that “buyer- and investor-led sustainability mandates continue to incentivise supply chain businesses to decarbonise their operations.” 

In other words, diligent reporting of the environmental impact of operations is increasingly a prerequisite for forging client partnerships and attracting investment. See for example last year’s announcement by Amazon that it will prioritise working with suppliers that can demonstrate their commitment to net zero.

One major fundraise in the subsector this year was the almost USD 70m Series B round closed by Makersite, a Stuttgart-based startup whose AI-powered platform creates digital twins of supply chains to provide a holistic view of their costs and environmental impacts. This data empowers businesses to take more sustainable and cost-effective approaches to the manufacture and shipment of their products – one such client being Microsoft, which reduced the carbon footprint of the Surface Pro 10 laptop by almost a third by using the platform.

If you’re a founder or senior decision maker at a company specialising in Supply Chain Management technology, we’d love to talk to you about potential opportunities in the M&A market right now. You can reach out to our sector principal Oliver Rupps to get the conversation started.

Don’t forget to also dive into our half-yearly M&A market reports which lay out the most notable buyer trends, deal data and case studies across a range of tech sectors, from Supply Chain Management Software to Digital Commerce to Healthtech. Subscribe to ensure you never miss out on the latest research and insights from the team of expert analysts at Hampleton Partners.