Wednesday, May 18, 2022

o9 Solutions raises $295M to implement analytics for supply chain and beyond

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Investors are throwing capital behind supply chain products as the appetite for e-commerce grows. According to Pitchbook, supply chain startups have raised $24.3 billion in venture funding during the first three quarters of 2021 alone — 58% more than the full-year total for 2020. Many companies that attract large investments focus on managing warehouses, matching freight loads. transportation, and the mapping of cost-effective routes – solutions for which demand is increasing due to both rising costs and increasing bottlenecks of logistics, the Wall Street Journal noted in a recent piece.

Several beneficiaries of BOOM include UK-based digital supply chain and freight platform maker Beacon and Altana AI, a startup building a platform to integrate global supply chain data. Other companies including Verusen, Paxafe, and NextBillion, and SourceDay have collectively raised hundreds of millions of dollars in capital. The investment craze has extended to the public market, where issuers such as ProShares and Breakwave now offer exchange-traded funds that track indices of companies involved in shipping goods and raw materials.

One of the more successful players in the market is O9 Solutions, a Dallas, Texas-based company that applies AI to help organizations plan their supply chains and more. o9 today announced that it has raised $295 million from General Atlantic and General Atlantic’s BeyondNetZero and Generation Investment Management, with participation from existing investors including KKR, valuing the company at $2.7 billion.

supply chain analysis

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

After i2 was acquired by JDA Software in 2008, Sidhu says he saw an opportunity to employ technologies such as AI, machine learning and analytics to focus on tackling key supply chain and business intelligence problems. He and Gottemukkala formed a team and consulted with potential customers to begin developing O9’s platform, which was launched in late 2014. Today, O9’s platform supports sales and marketing decision making in addition to supply chain management and planning.

“The lack of global supply chains, climate change and the cascading effects of a raging pandemic that can be felt at an individual level underscore the fact that we are clearly at an inflection point,” Gottemukkala said in a statement. ” “Our AI-powered, cloud-native o9″ [platform] was born out of a need to give organizations the ability to make faster, more integrated business decisions that create customer value and deliver superior financial results while making efficient use of the planet’s precious resources. We aim to develop the best platforms and solutions to help our customers in this important quest.”

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Fundamentally, o9 is an analytics platform designed to run on public cloud providers – for example, Amazon Web Services, Google Cloud Platform, or Microsoft Azure – with prebuilt predictive models tailored for specific scenarios. o9 can draw on data to make forecasts 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, tap into consumer market research, point-of-sales systems and even smartphone hardware.

Over time, o9 collates the data to build a knowledge graph. Like other knowledge graphs, o9 represents a network of objects, events, situations or concepts and shows the relationship between them – putting the data in context and providing a framework for analysis.

A business plan dashboard created by o9 Solutions.

,[T]The O9 platform was designed as an open platform, allowing companies to take advantage of new sources of data … and new algorithms for entirely new use cases,” the company said on its website. Beyond supply chain management and supply chain logistics for retail, o9 offers models for revenue management, integrated business planning, sales and assortment management.

Applied Analytics

In many ways, o9, whose clients include Anheuser-Busch InBev, Caterpillar, and Walmart, competes not only with supply chain management solutions but with platforms such as Fractal Analytics, which tracks trends across different markets and lines of business. Obtain data from different sources to make estimates. , Other vendors in the “big data analytics” segment include Nougat, Emply, Unsupervised, Pecan.AI, Tata Consultancy Services, Wipro, Trendense, LatentView and Mu Sigma.

Big data analytics refers to the use of analytical techniques to make sense of large, diverse datasets that include structured, semi-structured and unstructured data from a variety of sources and in varying sizes from terabytes to zettabytes.

Despite — and record investment — potential in big data analytics, some research paints a mixed picture of its return on investment. A 2021 NewVantage Partners report found that only 24% of executives believe their organizations deal with cultural barriers including lack of organizational alignment, business processes, change management, communication, people’s skill sets, and resistance or understanding. Have realized the goal of becoming data-driven. presents the biggest obstacle.

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As the Harvard Business Review discovered in a 2013 piece, big data is often hyped up so heavily that companies are hoping it will deliver more value than it actually is. Turning insight into a competitive advantage requires changes that businesses may be unable to make. And most companies don’t do a good job with the information they already have — between 60% and 73%, according to Forrester. Not all data in an organization is used for analysis.

,[W]Our most recent… survey found that businesses are starting to reap AI [and analytics] profit, the reality is that they are often not seeing financial returns – or worse, not even covering their investments,” PricewaterhouseCoopers analysts wrote in their July 2021 report. “Compounding the challenge is the fact that many organizations struggle to define the ROI for AI. [and analytics] in the first place.”

Still, according to Valuate’s reports, the global Big Data and business analytics segment could be worth around $684 billion by 2030 – assuming that’s the current trend. o9 claims that “one of the largest beer companies in the world” used its platform to drive demand and supply algorithms, reducing supply chain costs and boosting inventory in more than 32 countries. Another customer — an “American clothing and home decor retailer” — used o9 to replace manual and “Excel-driven” processes for inventory planning and management.

Sidhu said in a press release, “Not only is an agile, intelligent and resilient supply chain one of the most important growth accelerators, it naturally leads to a lower carbon footprint – especially in organizations operating globally. For.” On emphasizing the direct potential of o9 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 external financing from KKR (which took a minority stake) in April 2020, has raised $200 million in capital so far.

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