7bridges raises $17M to automate logistics supply chains using AI

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One of the most critical aspects of running a business is supply chain logistics, which involves moving components and eventually finished products from point A to point B to point C. It is also one of the most complexes. It involves dozens of companies and hundreds of combinations and permutations while accounting for world events outside of your business, and requiring many person-hours to figure it all out. The announcement of $17 million in new funding by a startup called 7bridges, which is attempting to simplify this through the use of an artificial intelligence-based automation platform (which ingests a company’s supply chain, operating, and logistics data and presents a user with optimized recommendations for how to move goods) is a sign of the market’s desire to address and fix how supply chains operate.

The investment group backed by Fidelity is heading the round for London-based Eight Roads Capital. 7bridges is partnering with Local Globe and enterprise VC Crane, both of which participated in 7bridges’ seed round in 2020 and are also participating in this round of funding. Through its venture capital arm, Maersk Shipping behemoth Maersk Growth has also joined the round as a strategic backer. Maersk will collaborate with 7bridges to integrate its logistics and shipping data into 7bridges to assist Maersk customers in managing their logistics more efficiently. The amount of the valuation is not being revealed. To present, seven bridges have raised little more than $20 million.

This Series A funding follows a period of rapid expansion for 7bridges, which presently serves around 20 big international corporations with software tools and solutions. Firms such as Amazon have amply proved that having a well-managed logistics supply chain may provide a significant competitive advantage. In an interview with 7bridges’ CEO Philip Ashton, who co-founded the firm with Matei Beremski (CTO), Ashton said that the idea was already generating significant interest. After that, Covid-19 occurred.

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According to him, “the pandemic provided a wake-up call for those corporations who had their heads in the sand before the outbreak.” “Having an adaptable supply chain is a cost-savings problem for businesses.”

This is the essence of the difficulty (and opportunity) that 7bridges attempts to solve. It arises from the evolution of supply chain business models through time and global events. It is no secret that supply chains and the flow of commodities are tremendously fragmented areas, which has become even more so in the past few years. Covid-19 significantly changed the way a company’s supply chain functioned, affecting many partners (if they continued operating at all).

The Covid-19 event also caused enormous increases in demand for numerous firms, particularly in high-demand sectors such as online retail, but also for any business that found itself constrained as a consequence of disturbances elsewhere (e.g., a pharmaceutical company seeing more orders for drugs in part because others are making less, or just because people became more anxious for their health).

In the usual course of business, a firm may deal with upwards of 30 distinct suppliers, ranging from those who provide components to those that transport parts or the whole product across the globe, depending on the organization’s size. According to the report, those partners will often operate inside their data silos, and some will be a long way from completing their so-called “digital transformation” journeys. Indeed, a surprising number of businesses in the broader world of business continue to operate on analog paper-based systems from the 1990s and early 2000s.

Everything from interruptions to outdated methods of doing things results in significant inefficiency. 7bridges offers McKinsey statistics that indicate that 50 percent of logistics cost is wasted due to gaps in business models that are not addressed. At the same time, it seems that there is a willingness to spend more to remedy the situation: almost 85 percent of supply chain executives said that inefficiencies in their present systems were “a reason for worry.”

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These were only a few considerations that played a role in Maersk’s decision to invest. “The supply chain has been thrust into the commercial limelight over the past two years,” said Oliver Finch, investment partner at Maersk Growth, in a statement. The industry must innovate to ensure continued access to the items we depend on. 7bridges has created a cutting-edge technological solution to digitalize the design, management, and optimization of supply chains. The system is based on artificial intelligence. 7bridges will allow a broader spectrum of enterprises to more effectively leverage the potential of data and artificial intelligence to enhance commercial decision-making more efficiently. “We think 7bridges can fill a huge market need while also considerably improving the supply chains of enterprises,” says the company.

Indeed, with artificial intelligence and automation finding their way into every area of how businesses are conducted these days, it was a no-brainer that a firm would emerge to create a platform that would bring it all together in one place.

Not to say that others had tried previously, but Beremski and Ashton stated that a variety of things prevented such attempts from taking off: either the timing in the market wasn’t right (a critical mass of people refused to jump on board), or the technology was still in its early stages of development.

“Companies tried their hand at this 15 or 20 years ago, but awareness and technology were just not on the same page,” Ashton said.

According to Beremski, “Now that there are more compute resources available, and the degree of machine learning, the maturity of the systems, as well as reinforcement learning and mathematical optimization, have just evolved in the past three or four years,” he said. Because of the digital revolution underway in logistics, all of the services provided by the industry are now available via APIs and are thus more easily accessible to customers. All of this makes the development of a system like 7bridges and the acquisition of consumers a much more realistic prospect.

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There has been an upsurge of other software businesses appearing to handle various areas of the logistics equation has also been beneficial, charting a route for further development in the field. They have included firms such as Flexport and Zencargo, as well as a vast wave of last-mile delivery startups, ERP companies such as Central, and companies concentrating on digitizing and defragmenting industrial capacity, such as Xometry. All of these have established the framework for a slew of new firms to enter the area and take on various additional challenges in the process.

Davor Hebel, managing partner and head of Eight Roads in Europe, said in a statement that “almost every shopper is confronted with substantial supply chain issues as a result of growing prices and a changing regulatory environment, and lacks the tools and know-how to overcome them.” According to the company, “7bridges is introducing a new category of value optimization software for logistics, which has hitherto only been accessible as a service to the biggest shippers from consultants.” We are thrilled to be working with the 7bridges team as they continue to grow the company.”

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