March 17, 2022

Investing in Real Stuff: How Spacefill transforms warehouse logistics and supply chains

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At NGP Capital we don’t shy away from the “Real Stuff”. Robotics, logistics and industrial automation requires a certain type of founder and investor. Luckily, more and more founders are diving into these less “sexy” complex markets, and great like-minded investors such as Eurazeo or La Famiglia back them.

Yesterday, we were excited and proud to announce our partnership with Spacefill, the leading European cloud-logistics provider. Maxime, Quentin, and Gustave founded Spacefill based on a drive to transform a critical, yet dysfunctional piece of supply chains, and we just led their €25 Mio Series A round together with our friends from Maersk Growth and participation from existing investors Eurazeo and La Famiglia.

We at NGP Capital believe in thematic investing and the concept of a “prepared mind”. What does that mean?

In 2019 we identified supply chain optimization as a target investment theme, leading to our investment in Shippeo. Our high-level thesis which we formalized during spring 2020 was the following: We believe that solutions that can integrate data across functions or help reduce fragmentation issues will thrive in a post-COVID era where operational resilience and costs are top of mind.

Since then, logistics costs have skyrocketed and most, if not all companies with a physical supply chain are struggling to balance demand and supply. This created a perfect storm for the emergence of new logistics and supply chain categories.

As part of our original thesis, we identified several insertion points along the supply chain that we believed to represent natural starting points for supply chain optimization.

Illustrative supply chain & collaboration requirements

Illustrative supply chain & collaboration requirements

Warehousing was one of these insertion points. Our reasoning is based on the following structural industry challenges:

  • The warehousing market is estimated at $60-80B in Europe, but is highly fragmented with a long tail of independent warehousing providers
  • Business models remain tuned to +5 year contracts with little or no flexibility. The remaining market is opaque for both demand and supply
  • High fragmentation of warehousing systems and software resulting in poor data quality and availability.
  • Workflow and collaboration tools are in most cases two decades behind mainstream technology adoption

Consequently, customer satisfaction in logistics is far from where it should be. Enter Spacefill. Based out of Paris, Spacefill disrupts the warehousing market by connecting large customers such as IKEA, Coca Cola and Leroy Merlin through the Spacefill platform with warehouse partners. Customers accept an additional layer between themself and the warehousing provider not only for facilitating the warehouse capacity, but also because Spacefill provides the software through which shippers and logistics providers alike operate and communicate. By integrating with warehouse management systems (WMS) on the one side and ERP systems on the other side, Spacefill provides a much needed collaboration, transparency, and data consolidation layer to improve visibility in terms of order status, inventory levels and so forth. No more calls or emails between the shipper and the warehouse.

Spacefill simplifies collaboration and reduces fragmentation with just one customer integration

Spacefill simplifies collaboration and reduces fragmentation with just one customer integration

Spacefill’s value proposition for warehousing partners is demand generation and software access that improves the warehouse’ operational efficiency. Even though warehousing capacity remains tight, many small and mid sized warehousing providers struggle with efficient demand acquisition and lack resources to invest and evaluate new technologies. The Spacefill platform allows warehousing partners to operate more efficiently thanks to shared real time inventory visibility, digital workflows and collaboration features between the warehouse and the shipper.

We believe that Spacefill is a critical missing piece in today’s warehousing landscape which consolidates supply, provides visibility of supply & demand, allows counterparties across the supply chain and operational personas to collaborate as well as optimizing distribution.

Solving the unique combination of complexities requires an extraordinary team. The ambition, always learning mentality and thoughtfulness of the fast moving Spacefill team embodied by the three founders Maxime, Gustave and Quentin represents just that. We are looking forward to supporting Spacefill in building a category defining company.