Energize leads Series A into Sourcemap
Yesterday we announced our growth equity investment into Aurora. We launched our growth platform because we listened to our entrepreneurs and ecosystem: our ongoing capital and time investment is a signal of belief and strength in the team and market. The Energize team aims to be a real partner along the journey delivering strategic insights and commercial advancements alongside our capital investments.
Our journey with a company usually starts much much earlier in the company’s life. We tend to invest at the inflection of commercialization – when we believe we have a “secret”. We leverage our market access and investment experience to identify the leading companies and then go all-in on supporting their growth. Our investment process begins with a research deep dive where we look to uncover how digital solutions will accelerate the sustainability movement. In 2021, Juan and Eileen led our team effort on a supply chain visibility deep dive. Today we announce the first investment from that process!
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Energize Ventures is excited to announce we are leading the $10 million Series A investment in Sourcemap, joined by existing investor E14 Capital. Sourcemap is an expert-developed software platform providing end-to-end supply chain traceability to a wide variety of industries, from food and agriculture to luxury goods. Energize Ventures partner Juan Muldoon will join the Sourcemap board of directors, and principal Eileen Waris will join as a board observer.
Supply chain traceability is becoming table stakes
The recent spotlight on global supply chains has exposed what many insiders have long known to be true—the goods and materials we useevery day depend on a dense yet fragile web of providers that can be difficult to track and trace. With global supply chain disruptions and regulatory crackdown on social and environmental implications at an all-time high, supply chain visibility is now of utmost importance to business operations. From chip shortages to commodity price spikes, procurement departments are facing new challenges every day – and many of them culminate at the border. In 2020 Customs and Border Protection detained $50M worth of goods at the border. In 2021, that number grew to $486M, and the U.S. is already on track to exceed $2B in goods detained this year. With the latest ban on all imports from Chinese manufacturing hub Xinjiang, these problems are not likely to improve any time soon.
The root cause of many of these challenges can be pinned down to lack of visibility and understanding of global supply chains. Businesses cannot foresee disruptions in their supply chains until they have a more complete picture of who their suppliers (and their suppliers’ suppliers) are. More andmore, companies are seeking solutions that help them map and manage their supply chains, from direct suppliers all the way down to the raw material. To contextualize the complexity of this task consider this—a major CPG manufacturer might have anywhere from 5,000 to 15,000 direct suppliers. Each of those suppliers has hundreds of their own suppliers. As companies try to map down to the source of raw material, the number of suppliers becomes dizzying.
This is where Sourcemap comes in. Sourcemap’s software platform digitizes end-to-end supply chain due diligence and customs compliance, enabling an unprecedented level of enterprise observability. Their universal ETL (extract-transform-load) data platform enables source-to-store traceability for any physical product. Sourcemap uses proprietary algorithms informed by decades of data to detect human rights violations, fraud, waste, and other risks throughout the supply chain. Customers across a broad swath of industries rely on Sourcemap’s solution to improve sustainability efficiency, resilience, and competitiveness.
The energy transition calls for a more transparent supply chain
As the race to decarbonize accelerates, the buildout of renewable energy infrastructure will require significant investment – to the tune of $4 trillion by 2030. Supply chain plays a critical role in the deployment of the next generation of energy. Why? An energy system powered by clean energy is fundamentally different from one powered by fossil fuels. The volume and type of materials needed to build and maintain gas plants and coal-fired power stations have little in common with those used in the deployment of solar PV and electric batteries. Displacing existing energy infrastructure with renewable energy assets will require further development of new supply channels in addition to higher upfront materials costs, even though the variable costs are significantly lower. With this shift comes a slew of new challenges related to responsible sourcing.
The renewable energy industry is well-aware of these challenges and prepared to face them head-on by investing now in solutions that help ensure their supply chains are resilient and responsible. We see a direct opportunity for Sourcemap’s traceability software platform to accelerate the deployment of renewable energy by helping developers and operators gain line of sight into their supply chains and address potential disruptions before they happen, all while ensuring environmental and social sustainability remains at the forefront.
Expert-led team primed for expansion
Supply chain compliance is not a space for tourists. And the team behind Sourcemap are no tourists. CEO Leonardo Bonnani has assembled a team of missionaries that have spent over a decade with boots on the ground, collecting data on the world’s most complex supply chains—from cocoa to conflict minerals. With minimal outside capital, they’ve been able to bootstrap the business that has grown to serve dozens of Fortune 500 companies.
With this most recent infusion of capital, Sourcemap will continue to invest in their core business, securing their position as the leader in supply chain transparency for food and CPG brands. As an investor, we will also support two major growth initiatives: expanding Sourcemap’s presence in Europe by building out their new Paris office and developing their offerings across new verticals including energy, auto, and pharma.