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OneRail Secures US$42 Million in Funding |
NEWS |
Earlier this month, last-mile solution provider OneRail raised US$42 million in Venture Capital (VC) backing for product development and to expand its team. The Series C funding round was led by Los Angeles-based Aliment Capital. The venture raise brings OneRail’s total funding to US$109 million. The Series C investment will be used to expand OneRail’s Software-as-a-Service (SaaS) platform, OmniPoint, aiming to streamline last-mile and fulfillment solutions for consumers.
OneRail has had an eventful year with regard to expansion. In June, OneRail acquired order management software company Orderbot. Before that, it also announced the launch of the new Inventory Visibility solution within its cloud-based platform to offer item-level visibility to companies.
Challenging Funding Environment in the Logistics Sector |
IMPACT |
A funding decline in the logistics industry has been a prominent problem for budding innovative companies and startups since 2022. After peaking at an industry-wide total of over US$25 billion in 2021, venture funding for logistics startups fell to just US$2.9 billion in 2023. This is a 2-year plunge of nearly 90%, and the lowest level of funding since 2015. A few factors can be attributed to this dip, including high interest rates until 3Q 2024. Because of this, global VC funding across all industries dipped to 35% from 2022 to 2023.
Another aspect of this is a downward trend in the underlying factors specific to logistics. The deceleration of e-commerce growth has been a prominent trend that has influenced funding. While the e-commerce market continues to grow, it has grown at a much slower pace compared to the pandemic heights back in 2020. E-commerce growth peaked at over 34% in 2020, falling to less than 5% by 2022. This decline has led to a decrease in global freight volumes, including maritime freight.
On the contrary, a large portion of the growing interest in startups within the investment community can be attributed to those focusing on last-mile delivery. Below are the startups that raised significant funding in the last-mile space:
Innovation Opportunities in the Last-Mile Delivery Sector |
RECOMMENDATIONS |
The last-mile delivery sector undoubtedly holds the greatest promise for innovation. A lot of this can be attributed to its direct impact on consumers, continued emphasis on streamlining e-commerce, and rapid urbanization. There’s also an added element of sustainability in the form of carbon-neutral delivery services and fleet electrification that’s growing. In addition to last-mile being the most expensive pillar of supply chain management, it has also been the fastest-growing one. According to ABI Research’s Last-Mile Delivery Solutions market data (MD-LM-102), last-mile delivery revenue globally will continue to grow by over 13% Year-over-Year (YoY) until 2032.
There are certain significant challenges that need to be addressed for businesses focusing on the last mile. Startups looking to grow need solutions that can scale beyond niche markets. Similarly, use cases surrounding efficiency and cost reduction need to be prioritized, as these are the biggest pain points in the industry. In addition, driving further innovation is required to draw interest from the investment community as the companies listed above have done. The following steps could be taken:
