Supply chain traceability companies increase in value

While deals slow, and capital raising does not imply relevant valuation growth

Last week, we talked about gold mining traceability, and for our premium subscribers, we’ll advance some numbers today. Investors and companies are developing solutions for mining traceability. As investors and consumers look for more sustainable ways of consuming, concerns with the traditional way mining processes happen raise questions and issues such as:

• They can lead to ecosystem disruption and represent a threat to natural environments. For example, according to a Brazilian Public Federal Ministry report, illegally extracting one kilogram of gold from the Brazilian Amazon generates 334,000 dollars in environmental damage.

• The lack of surveillance opens room for unethical and unsafe labor practices, negatively affecting close communities and workers\’ lives.

• Societal risks are not well addressed. Also, in Brazil, even legal mining companies\’ operations can lead to highly harmful situations. In 2019, one of Vale\’s mining dams collapsed, unleashing a wave of mud that destroyed houses and vegetation, killed several animals, and also took the lives of 270 people. The event is called the \’Brumadinho disaster.\’1

To tackle these problems, solutions that track gold – from its origin to its final consumer- increase relevance. Not only direct buyers but also funds and ETFs have grown attention to it sourcing exclusively from responsible mines, which will be under their scrutiny. The main characteristics of where these providers\’ gold should not come from artisanal origin – which is hard to track and apply quality evaluation.

The numbers below are supply-chain traceability companies\’ median pre and post-money valuations:

First of all, we can notice that their valuation has been increasing year after year – in 2019, the pre-money was on the $5m house, and in 2023 it reached its peak, $25m. We can also see that the differences between the pre and post-money valuation vary and that 2020 was an outlier year, where companies undervalued after investments due to the worldwide crisis.

2021 brought recovery to the industry, and in 2022, optimism raised post-valuation levels to their highestvalue —$27 m. 2022 was also excellent regarding post-money valuations, with a 40% increase in valuation post-money. 

While 2023 pre and post-money values keep growing, we notice a screaming difference regarding post-money valuations: increasing 4% of matter only. Besides 2020, it is the lowest percentage in the last 12 years, signaling a much more sober market and stricter times for these companies. Below we can find the 20 supply-chain traceability companies that have most raised funds:

The top investors by number of invested companies in this vertical are:

• Plug and Play Tech Center – US – Accelerator

• Techstars – US – Accelerator

• SOSV – US – VC

• Xeris – France – PE

• Albion Capital – United Kingdom – VC

• Mass Challenge – US – Accelerator

Would you like to dive deeper into the supply chain traceability vertical? Let me know what you\’d like to know better and I\’ll make sure to deliver the most complete research.