PAXAFE, a Milwaukee-based startup that applies AI and machine learning to manage risk in the supply chain, announced the company has raised $2.25 million in seed funding. The round was led by Ubiquity Ventures, bringing total funds raised to more than $3.2 million.
The company plans to use the new capital to push the rollout of its commercial platform to enterprise customers and broaden the capabilities of its software product, according to the release.
Founded in 2018, PAXAFE has developed a contextualization platform that enables shippers and insurers with predictive routing, time of arrival, and adverse event prediction for business-to-business shipments. The company’s product aims to address a “fundamental lack of product-level visibility through the global supply chain,” which leads to issues such as cargo losses and operational inefficiencies.
According to a survey from Cloudleaf and Sapio, there were $35 billion worth of annual losses specific to temperature controlled logistics challenges in the pharmaceutical supply chain alone. Issues such as theft, counterfeiting, damage and product loss in the food, technology and manufacturing industries experienced similar levels of losses.
Despite an abundance of asset tracking and visibility platforms on the market, cargo losses continue to rise year-over-year. Many of these platforms lack context leading to a data disconnect, said PAXAFE CEO Ilya Preston, by email.
“Current solutions in the market are the equivalent of fire detectors — once a problem occurs, they wake up and notify stakeholders that something is wrong,” the company said in the release. “What they cannot do is actually diagnose the ‘how’ and ‘why’ behind that particular problem. It doesn’t really empower stakeholders to make intelligent decisions.”
Having an automated diagnosis such as with the PAXAFE platform is one way for B2B shippers to mitigate supply chain risk across future shipments, the company added. The startup’s software provides shippers with real-time data including location tracking, environmental sensors, and temperature monitoring, allowing shippers to get ahead of any trouble.
These insights have become especially crucial during the pandemic where cold-chain partners increasingly rely on precise temperature readings, for example.
“Covid has only reinforced the demand for technology visibility platforms like ours, given Covid’s impact on various supply chains — from product integrity and temperature control requirements for the vaccine itself, to all of the lead time increases and delays that are impacting customer inventories, product availability and time of arrival,” explained Preston.
Over the past six months, PAXAFE has launched a series of paid pilots with companies across healthcare, perishables, oil and gas, logistics, manufacturing, jewelry and insurance verticals. About 10 of its pilot partners have signed on to its commercial product, Preston said.
“PAXAFE has made the assessment that visibility in and of itself is table stakes,” he added. “Customers need contextualization if they’re to put confidence behind the actionability of the visibility data.”
The startup expects to launch a Series A fundraising round in 2022.
