o9 Solutions raises $295 million to apply analytics across the supply chain and beyond

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Investors are throwing capital behind supply chain products as the appetite for e-commerce explodes. Supply chain startups have raised $24.3 billion in venture capital in the first three quarters of 2021 alone, according to to Pitchbook — 58% more than the year-to-date total for 2020. Many of the companies making major investments focus on managing warehouses, aligning freight loads with transportation, and mapping cost-effective routes — solutions that are in demand rising because of both the rising cost of logistics and the emergence of bottlenecks, the Wall Street Journal notes in a recently part.

The boom’s many beneficiaries include UK-based digital supply chain and freight platform manufacturer Beacon and Altana AI, a startup creating a platform to unify global supply chain data. Other companies, including Verusen, Paxafe and NextBillion, and SourceDay have collectively raised tens of millions of dollars in capital. The investment madness has extended to the public market, where issuers such as ProShares and Breakwave now offer exchange-traded funds that track the index of companies involved in the shipment of goods and commodities.

One of the more successful players in the market is: o9 Solutions, a Dallas, Texas-based company that uses AI to help organizations plan their supply chains and more. o9 announced today that it has raised $295 million from General Atlantic and BeyondNetZero and Generation Investment Management from General Atlantic with participation from existing investors, including KKR, valuing the company at $2.7 billion.

Supply Chain Analysis

o9 was founded in 2009 by Sanjiv Sidhu and Chakri Gottemukkala. Sidhu, a former AI technical staff member at Texas Instruments, previously founded i2 Technologies, which developed supply chain management software in the early 1990s and 2000s. Gottemukkala fulfilled various roles at i2 in the areas of product development, sales and strategy.

After JDA Software acquired i2 in 2008, Sidhu says he saw an opportunity to leverage technologies such as AI, machine learning, and analytics to build a platform focused on tackling major supply chain and business intelligence challenges. issues. He and Gottemukkala teamed up and consulted with potential clients to begin developing the o9 platform, which was launched in late 2014. Today, the o9 platform supports sales and marketing decisions in addition to supply chain management and planning.

“The profound effects of global supply chain shortages, climate change and a raging pandemic that can be felt on an individual level underscore the fact that we are clearly at a turning point,” Gottemukkala said in a statement. “Our AI-powered, cloud-native o9 [platform] was born out of the need to empower organizations to make faster, more integrated business decisions that create customer value and deliver better financial results, while efficiently using the planet’s precious resources. Our goal is to develop the best platform and solutions to help our customers in this critical endeavor.”

Essentially, o9 is an analytics platform designed to run on public cloud providers, such as Amazon Web Services, Google Cloud Platform, or Microsoft Azure, with pre-built predictive models tailored to certain scenarios. o9 can leverage data to drive forecasting from both unstructured and structured internal data sources, including customer relationship management software, procurement apps, warehouse and factory machines, and internet of things sensors. It can also connect to external sources, using consumer market research, point-of-sales systems, and even smartphone hardware.

Over time, o9 reconciles the data to create a knowledge graph. Like other knowledge graphs, o9s represents a network of objects, events, situations or concepts and illustrates the relationship between them – putting data into context and providing a framework for analysis.

A commercial planning dashboard built by o9 Solutions.

“[T]The o9 platform is designed as an open platform, allowing companies to leverage new data sources… and new algorithms for completely new use cases,” the company explains on its website. In addition to retail supply chain management and supply chain logistics, o9 offers models for revenue management, integrated business planning, merchandising and assortment management.

Applied analysis

In many ways, o9, whose customers include Anheuser-Busch InBev, Caterpillar, and Walmart, compete not only with supply chain management solutions, but also platforms such as Fractal Analytics, which ingest data from various sources to anticipate trends in various industries. markets and industries . Other vendors in the “big data analytics” segment include Nooogata, Imply, Unsupervised, Pecan.ai, Tata Consultancy Services, Wipro, Tredence, LatentView, and Mu Sigma.

Big data analysis refers to the use of analytical techniques to understand large, diverse data sets that contain structured, semi-structured, and unstructured data from different sources and in different sizes, ranging from terabytes to zettabytes.

Despite the potential of — and record investment in — big data analytics, some research paints a mixed picture of return on investment. A NewVantage Partners from 2021 report found that only 24% of executives believe their organizations have achieved the goal of becoming data-driven, with cultural barriers such as organizational alignment, business processes, change management, communication, people skills and resistance or lack of understanding being the biggest hurdles.

Like Harvard Business Review explored in a 2013 piece, big data is often so hyped that companies expect it to deliver more value than it actually can. Turning insights into competitive advantage requires changes that companies may not be able to make. And most companies don’t do well with the information they already have – according to to Forrester, between 60% and 73%. of all data within an organization is not used for analytics.

“[W]our most recent… survey found that companies are starting to harvest AI [and analytics] benefits, the reality is that they don’t often see a financial return — or worse, don’t even cover their investments,” PricewaterhouseCoopers analysts wrote in a July 2021 report. “The challenge is compounded by the fact that many organizations are struggling to define ROI for AI [and analytics] in the first place.”

Still, the global big data and business analytics segment could be worth about $684 billion by 2030, according to to valuation reports — assuming the current trend continues. o9 claims that “one of the world’s largest beer companies” used its platform to run supply and demand algorithms that lowered supply chain costs and boosted inventory in more than 32 countries. Another customer, an ‘American clothing and home decor store’, engaged o9 to replace manual and ‘Excel-driven’ processes for inventory planning and management.

“An agile, intelligent and resilient supply chain is not only one of the key growth accelerators, it also inherently leads to a smaller environmental footprint – especially for organizations operating on a global scale,” Sidhu said in a press release. emphasis on o9’s apparent potential to improve supply chain efficiency. “A sustainable supply chain requires companies to digitally transform their planning and decision-making capabilities.”

o9 Solutions, which took its first outside financing from KKR (which took a minority stake) in April 2020, has raised $200 million in capital to date.

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