Announcing our Latest Investment: Chain.io (Series A)

Supply chains are rapidly digitizing, but this is leading to a fragmented network of software that needs new digital infrastructure that can help these systems better communicate with each other and legacy systems. Enter: Chain.io.

We are proud to announce today that we have co-led an oversubscribed $11 million Series A financing in Chain.io, a leading “integration platform as a service” (IPaaS) company that is helping supply chains better integrate their systems and data. We were joined in this financing by our co-lead, High Alpha, with incredible support from other new and existing investors that include Mercury, Grand Ventures, Eve Atlas, and Waybury Capital. Chris Stallman from Fontinalis Partners has joined the Chain.io board.

Background

Only a few short years ago, my colleagues and I were probably in a small minority that found talking about global supply chains to be a perfectly reasonable and interesting conversation topic for cocktail parties, with random Lyft drivers, or while chatting with other parents at kids’ birthday parties. While it may have stood out to others as an esoteric topic at the time, two-plus years of a global pandemic, raging inflation, and geopolitical instability has highlighted the precariousness of the supply chains on which global trade is based upon. Now, this topic has reached the mainstream, and talking about supply chains has even evolved into “dinner table talk.”

One of the benefits of the state of our global supply chains entering our mainstream dialogue is that it has put an intense spotlight on this function. According to a McKinsey study, nearly three-quarters of supply chain functions are reliant on spreadsheets, and lack of digitization means 62% of companies have limited visibility into their supply chains — however, this is beginning to change and a wave of supply chain digitization is well underway.

Supply chain is one field, however, that is often functionally different from company to company (i.e., no two supply chains are exactly alike), and it is therefore impossible to develop a single software solution that perfectly solves all companies’ myriad of workflows and business challenges. The result is that enterprises adopt multiple vendors that may include ERPs, TMS, booking and pricing engines/marketplaces, visibility tools, etc. In order for these systems to communicate with each other, share data, and create a seamless enterprise function, they often have to be cross-integrated, which has been — to date — a highly manual task that grows in complexity as more software is adopted and it is one that does not scale (a friction to innovation!). Companies have been dealing with this by either building their own implementation teams and expending valuable resources to do this themselves, or they rely on outside vendors to manually do each one.

Supply chain networks are unique networks, with a variety of internal and external integration points

This is where Chain.io comes in. Chain.io has pre-built adapters that “snap together” applications to make connections that are quick, simple, secure, and resilient. These integrations are built with the complexity of supply chains in mind, and can even help bridge the gap between 1980s era systems (yes, Fortune 500 companies still run on these) to modern cloud solutions. The benefits of this approach are enormous:

• Shippers have the ability to quickly onboard new technology vendors so that they can transform their businesses, improve visibility, and shockproof their supply chains while saving millions in operating costs. By getting to value sooner and avoiding the long implementation periods that plague shippers (they can be years!), Chain.io helps reduce operational risk.
• Logistics providers have to manage integrations with hundreds of tools used by their customers, as well as their own systems. Chain.io streamlines this and allows for deeper customer integrations.
• Software providers can close deals and show value to their customers more quickly when integrations with other software solutions are no longer the bottleneck.

Sharing our Thesis

The central tenets of our thesis for making this investment boiled down to several simple points:

1. Technology will proliferate in supply chains, but it is likely to remain fragmented — Chain.io sits squarely at the center of digitization and software adoption, and can be a key enabler in accelerating those efforts by reducing the friction of cross-integrating these systems together.
2. A product platform that gets better every day, with growing network effects— Chain.io is constantly adding new software integrations to its platform, which assures customers that a relationship with Chain.io amounts to an investment in a platform that is constantly evolving and improving, rather than just a single point-in-time integration. As more integrations are added, the network effects in the business compound.
3. Clear evidence of the power of integration connectivity from other key industries — we’ve seen how Plaid has spawned tremendous innovation by bridging fintech with legacy banking institutions, and how others like Mulesoft and Boomi have supported generalist IT integrations. Twilio has proven that when you do integration well (in its case, communications), it frees teams to devote resources to other important functional areas.
4. Unique competency in supply chains — Brian Glick, founder & CEO of Chain.io, has spent his entire career helping large companies digitize their supply chains and is a highly product-focused founder. The Chain.io team deeply understands the workflows of its customers — from factory, to ocean, to truck, to warehouse..
5. Happy customers — One of the clearest signs that a company is “on to something” is when they truly understand (and solve!) their customers’ paint points. Our calls with customers confirmed our strong belief in the company’s product-market fit.

Next Steps

Now with the financing complete, the Chain.io team can get started on the next phase of growth. The company will continue to add connectivity to additional platforms while expanding its footprint across North America, Europe, and Asia (its customers are truly global). The company will also be using this round to add new talent to their world-class team. If you’re interested in joining a remote-first, highly inclusive company solving the world’s supply chain challenges, you can find out more here.

We’re excited to be a part of this journey ahead!

About Fontinalis Partners

Fontinalis Partners, with offices in Detroit and Boston, is a venture capital firm strategically focused on next-generation mobility. The firm was founded in 2009 and today manages approximately $275 million of committed capital and an active portfolio of more than 40 investments. Fontinalis is led by partners Bill Ford, Ralph Booth, Laura Petterle, Chris Cheever, and Chris Stallman. More information is available at http://www.fontinalis.com.