A logistics startup powered by artificial intelligence is looking to leave behind outdated systems that continue to slow the global supply chain.
Chicago startup Loop, which offers a modern audit and payment platform, raised a $35 million Series B round this week, co-led by J.P. Morgan Growth Equity Partners and Index Ventures.
Loop co-founder and CEO Matt McKinney said the startup's relationship with banking giant J.P. Morgan started as a customer and has been "transformational" to the company's growth over the past few years.
Founded in 2021, Loop launched from former Uber Freight team members who continued to see the same pain points in the global supply chain as disruptions from the pandemic and the war in Ukraine persisted.
"We had this massive multimillion-dollar problem with billing and payment, and we thought if this is a problem for us, it's probably a problem for other people. That's when we fundamentally realized it was a data problem," McKinney told Chicago Inno. "If you have ever seen a freight invoice, you've got 10 pieces of paper, 300 different surcharges, and you need a Ph.D. in freight billing to know what's going on."
McKinney has found that this can lead to "about 20%" of freight invoices having an error — bills that already take about 50 days to get paid.
"It impacts everyone in the supply chain because it's locking a lot of liquidity," he said. "And that's exactly why we built Loop — to remove the tax and unlock the profits for the entire supply chain."
Logistics and AI
While venture funding for tech startups has slowed from the highs of 2021, artificial intelligence is one area where top-tier venture capital firms continue to place their bets.
"AI is at the forefront of every industry right now, and I think the supply chain has the most to gain from AI," McKinney said. "Where the opportunity is with this new wave of AI — generative AI, language-based AI — is to take all of this unstructured data from all these different documents, spreadsheets, emails, and then triangulate it all together and do things with that data that you weren't able to previously to drive productivity and automation."
