Supply chain management includes logistics, the storage, administration, delivery, and transit of goods from one place of origin to another. Services like packing and moving, transportation, legal services, warehousing, inventory management, etc. are among the most popular logistics company types.
Due to its widespread applications, which enable companies to establish their position in the global market, the logistics sector has recently experienced exponential expansion. The present size of the worldwide logistics market is $10,115.6 billion, and by 2027 it is expected to increase at a CAGR of 5.7% to reach $13,326.3 billion.
Additionally, with the over 25% growth in eCommerce services, supply chain, and logistics management projects appear to be receiving more global attention. This is perhaps the reason why businesses all around the world are developing cutting-edge logistics solutions and aggressively seeking investors for logistics startups. According to studies, funding for logistics startups nearly increased in 2021 compared to 2020, spawning a number of subsectors within the logistics industry.
According to a recent review of a sample of more than 500 logistics firms, investors have invested $80 billion in logistics. This investment for logistics startups was examined regarding the sector, location, period, and pandemic-related effects.
Working on your own logistics company would be a terrific option under such favorable circumstances. Finding an investor for your logistics company may still be a formidable challenge. But don't worry; this article will acquaint you with the locations of current investments in the logistics business and will provide you with advice on how to get investors for your logistics startup. So be sure to tune in until the very end. Let's start.
What Do Investors Look For In a Logistics Startup?
As was already mentioned, the global pandemic significantly sped up eCommerce growth, increasing it by 25% in 2020 and another 11% in 2021. This is the main factor attracting investors to logistics businesses, particularly in the most untapped potential areas. Logistics companies centered on eCommerce delivery apps, supply chain visibility, and last-mile logistics management are of particular interest to investors in the logistics sector.
Integrating Supply Chain Visibility In Your Logistics Startup Attracts Investors
When funding for companies that address visibility tripled in 2021, the subject of supply chain visibility in the process of logistics investments attracted interest. Visibility is required as more logistics investors see the need for supply chains that are more agile and flexible thanks to digital transformation and that can swiftly adjust to outside variables like transportation limits.
By integrating greater supply chain visibility, logistics businesses can enable stability and improved communication between various stakeholders to pinpoint the issues better.
For instance, Remotestate improved supply chain visibility for a global manufacturer by 70%, which resulted in a 35% increase in everyday operational efficiency and a 45% reduction in transport and logistics costs. By integrating an intelligent logistics and supply chain software solution, this US-based enterprise became more responsive to its customer’s needs. Moreover, the process automation solution allowed the supply chain business to focus on other challenges.
Overall, the logistics business models to receive funding dynamically range from transport, fulfillment storage, parcel services, courier express, and their subcategories. Here are the segments with the most percentage of funding.
Steps To Get the Right Investors For Your Logistics Startup
If this is your first job with a logistics business, you must thoroughly research your industry expertise. A logistics venture capital studio can also assist you in obtaining the necessary funding for your firm.
Working with reputable logistics software development services will also allow you to take advantage of the knowledge and experience of professionals in the field who have already been where you are. Your project will benefit from the many creative ideas that a logistics development business will provide you with in order to meet market demands.
When your product is finished, use the methods described below to acquire investors for a business in logistics;
Build a strong network
Building a network might be challenging for start-up companies, but it's essential to winning over customers, suppliers, and colleagues in the sector. Investors pay great attention to the trust element when their money is at stake, so make sure you leave a positive first impression.
The finest places to find possible business partners are at logistics conferences, exhibitions, and events. See if you can make connections with logistics firms that can offer you financial support or help you build a clientele. Select a partner or investor who will help you navigate the process of expanding your firm.
Thoroughly investigate potential investor
It's also crucial to get to know potential investors well before approaching them so you can comprehend their needs. On the other hand, you will be able to assess what advantages your logistics startup may offer them. Determine the necessary justifications for their support of your logistic startup.
Their background in investments is something else to pay attention to. Recognize the kind of logistics business concepts in which they have previously invested. Finding investors who are the perfect fit for your logistics company will be possible.
Offer a practical business plan
Create a compelling proposal about logistics investors and their investments after reaching out to potential investors. Put yourself in the shoes of your investors when delivering your proposal. Consider: If you were an investor, what would persuade you to invest in a logistics startup?
Additionally, include a business plan that can be realistically accomplished. Your logistics software development team can review your company plan to see if it is convincing enough. Further, include your logistics investors in the development of future plans.
Participate in a seed accelerator program
Joining a seed accelerator program for new logistics startups is recommended. These programs will mentor you, train you, and provide seed funding to help you scale your idea, especially if you have no industry connections. Such programs also provide the necessary assistance to help your startup project thrive in times of crisis.
You will be given the opportunity to collaborate with other logistics startups to broaden your network. If you did well, you would receive a badge that would aid in funding negotiations. The badge indicates to your logistics investors that you are a trustworthy and knowledgeable logistics business partner.
Get investors interested in numbers
This is a simple step that has a significant impact. Rather than simply stating the benefits of investing in your logistics idea, show them the ROI in numbers. Show how you can achieve results in the time allotted and when your logistics partner will begin to benefit.
How can Remotestate help you with startup app development and logistics software development services?
Remotestate is a market leader in software development for startups and enterprises. We assist startups in converting idea concepts into deployable MVP products in a short period of time. Our approach entails discovery workshops, scoping sessions, and business analysis, during which we define and elicit your company's functional and non-functional requirements.
Custom logistics software development, telematic software development, asset tracking, transportation, freight logistics software, and much more are all part of our logistics suite of services. To get started immediately, contact our logistics experts and let us be a part of your success journey.