Good capital chasing good logistic tech platforms
Amidst the Covid-19 pandemic FarEye announced a funding of $25 million reinforcing the criticality of SaaS platforms like the ones provided by FarEye. Kushal Nahata, CEO
Reducing operational costs and delighting customers have always been the two daunting tasks of global supply chain management. But with the right digital tools that are powered by cutting edge technologies like machine learning, predictive intelligence, data analytics, Internet of Things and automation, the traditional supply chain challenges are addressed by highly advanced and cost efficient logistics platforms as Software as a Service or SaaS. FarEye is a leading SaaS platform for predictive visibility. It enables brands to orchestrate, track, and optimize their logistics processes. It is increasing efficiency in the movement of goods for both B2B and B2C segments – and helping businesses achieve growth and exceptional customer experience at a reduced cost. FarEye has a customer list that boasts of some of the leading global brands in the manufacturing, retail, transport and logistics sectors. Amidst the Covid-19 pandemic FarEye announced a funding of $25 million reinforcing the criticality of SaaS platforms like the ones provided by FarEye. Kushal Nahata, CEO & co-founder, FarEye.
Tell us a bit more about your latest round of funding of $25 million led by M12, Eight Roads Ventures, Honeywell Ventures, and existing investor SAIF Partners.
The conversation on funding started much before the pandemic. We were planning to raise it somewhere in the middle of this year. But I think there was a change in the way investors looked at things happening since the Covid-19 became a pandemic. Every industry was impacted but logistics was a beneficiary and it caught the attention of investors. All of a sudden things like last mile & home deliveries and end to end visibility became the top priority for manufactures. This attracted investors.
Our SaaS platform for predictive visibility has been globally recognised and there has been a surge in demand in the last couple of years. We have been fairly selective in terms of getting investors on board. We look at them as partners. Capital is something you, as an organisation, can get if you're doing well. But the question is how can they add value to your growth? And we are glad that we have a much diversified board.
Give us a sense of how you intend to scale your businesses – in product offerings, geography expansion – using the latest round of funding?
For us the priority is to digitalise and bring visibility for our customers. This has given them a lot of value because now they know where the shipments are and when they will get them. We have changed the way logistics and supply chain used to operate by just providing them real time information. Now the next expectation is how to be preventive and prescriptive. So we are investing a lot in artificial intelligence and machine learning technologies to make the digital supply chair right. So this is what we call the digital twin. There is the physical and there is the digital, a copy of the physical. When we started the journey it was broken and now we are in the process of solving this and we are working to make them function better. But I still feel digital will move more towards prescriptive and preventive. This is where our platforms can help them understand and predict things before they occur and our platforms will offer solutions to prevent them. So we are investing a lot from a technology and product perspectives. We started in India and scaled our operations and expanded in Asia in Europe. We started in the Americas last year. We will invest heavily in the Americas and the Europe because these are the regions where we see huge growth potential.
We feel unless companies grow their logistics infrastructure, they will not be able to survive. So it's less about growth and more about survival. And interestingly, with Covid-19, companies have started realising this faster than what they would have done in a normal scenario. So that's why, for us, it's now a question of how can we ensure we provide that seamless experience. We are investing continuously in both product and technology to ensure that we are able to serve our customers globally.
The current crisis not only saw you make headlines raising the $25million funding but also in increasing your workforce at a time people are losing jobs. What made you to go aggressive in hiring more people?
I would say that it was a pure business call. As customers started ordering everything online because of lockdown and social distancing, home deliveries surged more than ever. Product categories ordered online were different from the normal times. No one is ordering fashion but daily essentials like groceries and electronic goods are in high demand because people are stuck at home and working from home. So people are spending and we saw demand for home deliveries on the rise. Therefore we had to increase our workforce and build larger teams. I also believe that this was the best time to scale and strengthen the team.
Are you happy for the way the venture capital discovered logistics industry around 2013, also the time FarEye started its operation, and the way this has accelerated over the years to make logistics industry ready for a tech-enabled ecosystem?
I wouldn't disagree. Logistic platforms or logistic technology have now become a favorite for venture capitalists right now. If you read about the amount of investments which is happening in logistics and logistics technology, they are at the peak right now. And it is going to increase further because it is happening not just in B2C industries but even B2B. The emphasis is on investments in digitalising supply chains and that has become a priority for any brand or any manufacturer. Their questions are: How do I reduce my entire logistics cycle? How do I reduce my inventory?
Now the shorter your logistics cycle the more efficient your business. However, the challenge is to be the first mover. Ecommerce became the first industry which really changed the logistics expectation. They pushed logistic players to question their process. Why do you need five days to deliver products which could be delivered on the same day or the next day? Suddenly new ideas and visions began to take shape. Five years from now, the way logistics functions will be fundamentally different from what it is today. For this kind of a change to happen, companies like FarEye will play a very crucial role.
Do you think that the Covid-19 pandemic exposed the fact that companies with a robust digital strategy are managing to deal with the crisis better and they have a competitive advantage now?
Absolutely. Look at the share markets. Companies which are able to manage their supply chain well despite the pandemic are the ones performing well. So Covid-19 actually made this thing more obvious both for their customers and for their management. Look at the omnichannel. Do we know where the goods are? Is everything digitalised? Perhaps not. We still have much less visibility of the supply chain. For instance, a full truckload is dispatched and it is expected to arrive at the destination in three to four days. And most of the time if there is no complaint from the customer is it is believed that the product has been delivered. That's how the internal processes work in the logistics departments of most enterprises. But this is changing.
So if you ask me, do you see a big surge for the industry where the business is not at its peak? Yes, because companies have understood that digitalisation of their supply chain is very critical to their business. If they can reduce the cost, bring transparency and provide a better customer experience, it will change the company’s revenue and profit.