Weekly Roundup - Logistics Funding Plunge, Europe’s First Major Factory for LFP Batteries and Douglas’ Mixed Financial Performance

The logistics sector has seen a sharp decline in venture capital funding post-pandemic. After a peak of $25.6 billion in 2021, funding dropped nearly 90% to $2.9 billion in 2023, the lowest since 2015. This decline is driven by high interest rates, a global slowdown in shipping, and excess cargo capacity lowering freight rates. The logistics industry's share of total VC funding fell from about 3% in previous years to 0.8% in 2023, reflecting a broader 35% drop in global VC funding.

Despite challenges like slower e-commerce growth and falling freight volumes, some segments, such as last-mile delivery and digitalization-focused start-ups, continue to attract investment. While the current outlook is uncertain, there is confidence that logistics funding will rebound. Start-ups need to focus on profitability, and investors may find opportunities in realistic valuations and M&A. The sector's potential remains strong, with VC investment expected to recover as confidence returns.

The German export industry has struggled in the first half of the year, with both exports and imports experiencing declines compared to the previous year. Exports fell by 1.6% to €801.7 billion, while imports dropped by 6.2% to €662.8 billion, leading to a 28.7% increase in the foreign trade surplus, now at €138.8 billion. The slowdown is particularly noticeable in major industries like automotive and machinery, with car and parts exports down 2.4% and machinery exports down 4.4%. The U.S. remains Germany's largest export market, while China is its biggest importer, achieving an export surplus of €25.3 billion against Germany.

Morrow Batteries has opened Europe’s first major factory for lithium-iron phosphate (LFP) batteries in Arendal, Norway, aiming to secure NOK 1.5 billion ($140 million) in government funding and enough customers to cover its first year of production. Led by CEO Lars Christian Bacher, the company focuses on energy-storage applications and is positioning itself as a sustainable, low-emission alternative to Chinese suppliers. Morrow has secured its first sales contract and is in advanced talks to cover initial production. Morrow's new factory, covering 33,000 square meters, marks a shift for Norway, traditionally reliant on oil and gas. The company faces challenges in securing funding due to the evolving financial market, which now prioritizes proven production capabilities at scale.

Douglas, a leading perfumery chain, managed to boost its earnings through cost-saving measures, particularly by improving delivery processes. In the three months ending in June, the company saw a 5.6% rise in its EBITDA, which reached nearly 163 million euros when adjusted for special effects. This increase in operational efficiency reflects Douglas's efforts to enhance profitability in its day-to-day business. Despite this positive development, the company's overall financial position worsened, with net losses deepening significantly. Douglas reported a loss of 71.6 million euros in the third fiscal quarter, a sharp increase from the 26.1 million euros lost during the same period the previous year. The company attributed this larger deficit to negative one-off effects related to bond repayments as part of its IPO in March. On the revenue side, Douglas performed strongly, with net sales increasing by 7.3% year-on-year to 977.1 million euros. The Executive Board confirmed the positive revenue trajectory and maintained the raised annual targets, reflecting confidence in the company's continued growth despite the financial challenges.

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Dive deep into research

"Hunger games search optimization with deep learning model for sustainable supply chain management" by Xu, Z., Jain, D.K., Neelakandan, S. et al. (2023)

"Disruption detection for a cognitive digital supply chain twin using hybrid deep learning" by Ashraf, M., Eltawil, A. & Ali, I. (2024)

Events

Seamless

When: 10. - 11. September 2024

Where: Munich, Germany

What: Seamless Europe is an event designed to drive forward the future of digital commerce. We will unite two core eco-systems, payments & fintech and then retail & e-commerce. This event is for merchants, enterprise, SME’s in the digital commerce space looking to network with attendees, learn during our conference and meet with solution providers from the payments, fintech, retail and e-commerce space.

Digital X 2024

When: 18. - 19. September 2024

Where: Cologne, Germany

What: Digital X is a leading digital transformation event series organized by Deutsche Telekom in Germany. It focuses on helping businesses navigate and harness the opportunities of digitalization across various industries. The event brings together top industry leaders, technology experts, and innovators to discuss emerging trends, showcase cutting-edge technologies, and share best practices for digital transformation. Digital X features a mix of keynote speeches, panel discussions, workshops, and exhibitions, offering attendees insights into topics like artificial intelligence, cybersecurity, IoT, 5G, and more.

Bits & Pretzels

When: 29. September - 1. October 2024

Where: Munich, Germany

What: Bits & Pretzels is an annual startup festival held in Munich, Germany, that brings together entrepreneurs, investors, and innovators from around the globe. Known for its vibrant atmosphere, the event combines insightful keynote speeches, panel discussions, and networking opportunities with a touch of Bavarian culture. With a focus on fostering connections and inspiring new ideas, Bits & Pretzels has become a key event in the European startup ecosystem, drawing industry leaders and emerging talents alike. The festival's unique blend of business and tradition makes it a must-attend for anyone passionate about entrepreneurship and innovation.