Logistics and supply chain management is a notoriously outdated and labor-intensive process. ClearMetal uses artificial intelligence to help manufacturers and retailers climb out from underneath piles of spreadsheets. Today the San Francisco-based startup announced that it has raised $9 million in Series A funding led by Prelude Ventures and Innovation Endeavors, the venture capital firm founded by Alphabet executive chairman Eric Schmidt.
NEA, SAP.io, PSA Unboxed, DCLI and John Urban, a founder of cloud-based supply chain management platform GT Nexus, also participated in the round. Along with a $3 million seed investment raised in February 2016, this brings ClearMetal’s total funding so far to $12 million.
ClearMetal, whose customers already include logistics provider Panalpina and paper goods giant Georgia-Pacific, was created because its founding team “saw a multi-trillion dollar global trade industry that moves 90 percent of everything around the world wasting billions of dollars as a result of not having the right tools and technology to handle the ever-increasing complexities of the supply chain,” says co-founder and chief executive officer Adam Compain.
Many companies still rely on spreadsheets and legacy software. ClearMetal, whose other founders are head of engineering Diego Canales and head of technology Will Harvey, wants to replace those outdated tools with its SaaS platform, which uses artificial intelligence to canonicalize freight data, or convert it into one standard format, and create more visibility for the entire supply chain.
ClearMetal’s technology also uses freight data to deliver predictions that help companies make inventory management decisions and avoid running into issues. As an example of how the platform can potentially benefit users, Compain describes a large retailer that needs to get shirts from a factory in China to its distribution center in Chicago in time for Black Friday.
This usually means it must make an order 60 days in advance to account for shipment delays. Even then, the retailer still has to budget for emergency air shipping because it doesn’t have a lot of visibility into the status of its freight.
ClearMetal’s platform, on the other hand, not only tells the retailer where its shipment currently is and predict transit delays, but also selects which ocean carriers to use by analyzing their service reliability. The retailer is therefore able to save money on shipment costs, nail down an arrival time for its shirts and avoid ordering backup stock. While the amount varies by company, Compain says ClearMetal’s customers have “cited tens of millions of dollars of value potential” by using its technology.
“Often we draw the analogy to the early days of mobile technology,” Compain says. “We’re helping equip supply chain operators with a smartphone when traditionally all they’ve been given is a flip phone.”