For several years now, ILOS has been accompanying entrepreneurship and innovation actions in the field of logistics and supply chain. In 2016, consultant Fernanda Monteiro wrote on our blog about the fever of logistics startups, motivated mainly by Uber, which had been operating in Brazil for only 2 years and was already showing huge success in its operating model. This rupture in the traditional way of doing business was so intense that it even gave rise to a new jargon in the business world, portrayed in 2019 by the consultant Bruna Basile, who presented a discussion on our blog about the crowdsourcing and theuberization” from work.
Motivated to follow this line of discussion, I asked myself if the world of logtechs would have changed drastically after the effects of the Covid-19 pandemic, which exponentially increased the strength of e-commerce and generated strong economic crises at a global level. The term "logtech” was designed to describe startups that focus their efforts on solving logistics problems, not by chance using technological solutions.
According to Exam Magazine, despite all the crisis generated, the startup market in Brazil continued to grow throughout 2021, with the main focus on the B2B public and a SaaS model (software as a service). One of those companies that was born in the chaos of the pandemic was CargOn, which even though it was founded in 2020, earned BRL 6,5 million in 2021 with the provision of logistical services. Another example of a company that was not shaken by the pandemic was Modern Logistics. Created as a startup in 2015, it operates as a logistics operator in various activities and its strong point is its own fleet of planes that carry out cargo operations. According to Gerald Blake Lee, CEO of the company, the main objective of the company is demystify the belief that air transport is only justified for products with high added value.
In addition to paying attention to emerging companies, it is also important to highlight those companies that were promising and reached the select rank of unicorns during the pandemic. At the end of last year, after the merger with Navegantes and Navegantes, CargoX became the new Brazilian unicorn under the name of Grupo Combate.com when it received a contribution of BRL 1,14 billion, following the promise already presented by the consultant Henrique Alvarenga in the post “The unicorns of logistics”. Like Modern Logistics, the 3 logtechs merged companies also belongs to the group of the 10 largest logtechs of Brazil.
With an extensive list of successes that do not stop at the examples cited here, it is evident that the pandemic served as a great springboard for the logtechs. However, I still wonder how real was the change presented by these startups that justified the emergence of new business solutions. Much is said about how the pandemic has changed and/or will change the way we interact and do business from now on, but the reality I see for the world of logistics is not very different from that pre-pandemic. When we speak exclusively of disruptive solutions, such as “uberization”, little has effectively changed since then, even with the drastic alteration of some economic paradigms.
Evidencing this argument, all the startups mentioned here have as their main focus the solution of information management in the supply chain, a problem that already existed in the pre-pandemic reality, adapting this solution for each type of business. In addition, the Logtech Report 2020 District also found that, in 2020, the height of adaptations due to the pandemic, 50% of acquisitions of logtechs happened by large Brazilian retailers. As a more recent example of this type of movement, we can mention the acquisition of CNT by Via Varejo in January of that year, taking responsibility for the entire e-commerce operation with Mallory, from planning to deliveries. Another great example was the entry of Americanas in the sector of ultra-fast deliveries, made possible by the purchase of the startup Shipp (today Americanas Delivery) in the year 2021. It is evident then that the pandemic has accelerated many decisions related to e-commerce, motivating companies to acquire fast, highly responsive last-mile delivery solutions. However, despite this being a legitimate problem, it already existed prior to the pandemic, even if on a smaller scale.
It is undeniable that the world has changed drastically in the last 2 to 3 years, and logtechs advanced advances that traditional companies would possibly take decades to solve, but the universe of logistics still has an ocean of possibilities to be explored. Perhaps this is the time to not only innovate in the use of technologies for traditional solutions, but also to focus on non-traditional solutions to post-pandemic challenges.
If you are interested in the discussion, the 28th International Supply Chain Forum will take place between October 18th and 20th, 2022 and will feature several trails, one of which is “Customer Centric and the New E-commerce Challenges”, where we will discuss the real new problems to be faced in the post-pandemic world , which is more focused than ever on the final consumer of the products.
References:
– ILOS – The fever of logistics startups
– ILOS – Uberization of Work and Crowdshipping
– Exam Magazine – Startup market ignores the pandemic and grows in Brazil in 2021
– Startups.com – Offspring of the pandemic: 4 startups that were born and took off amid the crisis
– Infomoney – Gerald Blake Lee, ex-Azul and owner of Modern Logistics, expects to raise US$ 250 million to buy planes and connect producers
- District - LogTech: overview of the 283 startups in the logistics sector in Brazil
- Exam - CargoX: with a contribution of BRL 1,1Bi, the unicorn Grupofreight.com is born
– ILOS – The unicorns of logistics
– Markets and consumption – Via's Logtech takes over Mallory's e-commerce logistics operation
– E-commerce Brazil – Americanas launches delivery for delivery in about 30 minutes
- District - Brazilian Unicorn Startups: check the list
– CBIInsights – The Top 12 Reasons Startups Fail
