Logistics start-ups saw venture capital (VC) funding plummet to $2.9 billion in 2023 from a peak of $25.6 billion in 2021. The decline is a result of slower e-commerce growth, smaller trade volumes, and fluctuating freight rates. Nonetheless, senior partner Ludwig Hausmann and coauthors say the logistics sector holds substantial potential, expecting start-ups to attract more than 1 percent of total VC funding and eventually 10 percent, aligning with the industry’s contribution to GDP.
Image description:
Two charts show plummeting investment in logistics start-ups between 2014 and 2023.
The first chart, a set of vertical bar graphs, shows the total logistics funding in billions of dollars over this time period. Funding was at under $1 billion in 2014 but grew steadily, reaching over $25 billion in 2021. After that, it fell, dropping to about $3 billion in 2023. The second chart, a line graph, shows logistics funding as a percentage of total venture capital funding from 2014 to 2023. The percentage was about 0.5% in 2014 and grew to about 3.5% by 2018, before falling steadily, and then sharply. By 2023, it had dropped to less than 1% of total venture capital funding.
Source: Crunchbase; PitchBook; McKinsey analysis.
End of image description.
To read the article, see “Logistics start-up funding: The investor pullback continues,” July 24, 2024.