August 11, 2022 | by Sarah Benhamou, Principle, BGV Europe and Israel
Over the last two decades, the world of commerce has changed radically.
Whereas shoppers would once visit a large mall to shop for clothes, jewelry, and electronic items, today one in four shoppers orders their goods online.
The Covid-19 pandemic only accelerated the ecommerce trend. In 2021, digital sales increased by 4.4 percent, translating into 900 million more digital shoppers worldwide.
The ease and convenience of online shopping is affecting other industries as well. Amazon.com now promises shoppers same-day delivery in many locations, forcing logistics companies to meet new standards.
At BGV, we’ve been watching the logistics industry closely over the last few years, and recently made an investment in a company that we believe will be a major player in the European market and beyond.
Kardinal.ai is a Paris-based company offering a logistics intelligence platform powered by artificial intelligence (AI). It’s Always on Route Optimization Solution, one of several products in its suite, enables clients to plan, monitor, and analyze delivery and supply routes, allowing transportation companies to cut costs, improve services, and reduce a fleet’s Co2 footprint. From territory analytics and optimization to picking optimization, including route optimization, Kardinal is becoming a central strategic tool for logistics players.
Kardinal’s comprehensive offering, which allows faster, greener, and less expensive deliveries, inspired us to lead their €10 million Series A funding round, alongside Cap Horn Invest, Plug and Play Ventures, and Serena.
Greener, Faster, Cheaper
Kardinal is squarely at the center of BGV’s Enterprise 4.0 focus. Powered by AI, its software solution can be adapted to any number of intelligent automation scenarios.
Global shipping for parcels reached 131 billion in 13 major markets in 2020. That translates into an astonishing 4,120 parcels shipped per second, a 27 percent increase over 2019. Looking ahead, the Parcel Shipping Index forecasts up to 303 billion parcels shipped by 2026.
At the same time that parcel shipping is booming, there has been a concurrent shortage in available drivers, an increase in fuel prices, and a shift in consumer expectations spurred by Amazon.
Kardinal’s software solution improves operational efficiency among carriers by 10 to 40 percent, depending on the industry. Optimized routes and data analysis of past performance also means Kardinal offers to cut the carbon emissions of customers by 30 percent.
It’s All in the Algorithm
While we targeted an investment in the evolving global logistics industry, we felt confident in Kardinal’s product after learning more about the company’s proprietary mathematical algorithm, which adapts to any client’s needs and works in real time.
The three Kardinal founders include two entrepreneurs and a PhD in mathematics. A team of four doctoral students worked for five years to develop the proprietary code. In addition, the founders added COO Denis Colin, formerly of Alcatel, Nokia, and IBM, to lead the company into international markets.
We’re impressed by the maturity and ambition of the team and look forward to working with them to scale their development in Europe and beyond.
