SINGAPORE (Nov 11): It began as an anti-Valentine’s Day in 1990s China, celebrated on Nov 11. Written numerically as 11/11, the date even looks like “bare branches” — a local term for being single.

Now, Singles’ Day (also known as Guanggun Jie) has grown into the world’s biggest annual online sales event, where Asian customers raid e-commerce platforms to score deals and discounts. It is big business: Last year, more than 180,000 brands participated in the event, raking in more than $41 billion.

ore than 200,000 brands will participate this year. This surge in sales will undoubtedly create a boom in the logistics sector — an area that Singapore-based Reefknot Investments is keen to tap.

To that end, Reefknot — a joint venture between Singaporean sovereign wealth fund Temasek and Swiss logistics company Kuehne + Nagel International — has launched a US$50 million ($67.8 million) global fund to invest in start-ups in the supply chain and logistics industry.

Details are still scarce, however, but The Edge Singapore understands that Reefknot will also provide start-ups tapping into this fund with access to the business insights and reach of Temasek, along with the logistics and supply chain expertise of Kuehne + Nagel.

But it is not just events such as Singles’ Day — now racking up record sales surpassing American events such as Black Friday, Cyber Monday or Amazon Prime Day combined — that are shaking up the logistics sector. Growing urbanisation and increasing trade and investment are also contributing to the boom. As the industry grows, there will also be a demand for smoother and more efficient operation in the region, says Reefknot.

To help spur growth in this sector, the fund will invest in growing companies that are raising their Series A or Series B rounds, explains Reefknot director Marc Dragon. These start-ups would also be able to leverage Reefknot’s partners, such as SGInnovate, PSA unboxed, EDBI, Unilever Foundry and NUS Enterprise.

Asked how Reefknot will pick a start-up to invest in, Dragon says: “We look at the industry and solution areas. Within those solution areas, we look at which other start-ups are in that space and the differentiation between the start-ups, be it in technology or business model.

“From there, we shortlist things to look at such as the founders and team. We want to know whether they can bring the company to a stage where we would like them to be.”

Companies can also contact Reefknot directly “through social media such as LinkedIn” if they are interested in funding.

Meanwhile, the fund will also seek newer start-ups through its joint-venture partners, especially Kuehne + Nagel.

It is in no rush to sign up just about anyone, though.

“We will monitor the start-ups that we think have interesting technologies or business models, but if they are in a very early stage, we might not invest in them. Instead, we might meet up with them, monitor their progress and invest in them once they have grown to a certain size,” Dragon says.

Last year, the global logistics market reached a value of US$4.7 billion and is projected to see a compound annual growth rate of 4.9% in 2019 to reach US$6.3 billion in 2024, according to market research firm IMARC Group.

It is clear, however, that this thriving sector is nothing new. For example, Chinese e-commerce giant Alibaba Group Holding held its first Singles’ Day sale in 2009.

So, could Reefknot be jumping into the scene a little too late?

No, according to Dragon, who says Reefknot will focus more on the business-to-business aspect of the industry, as that portion of the logistics industry is now “right for transformation”.

“We are unique in the industry because we are one of the very few players that are global and focused only on the supply chain and logistics industry,” he adds.

On Oct 30, Reefknot announced that it had made its first strategic investment in UK-based artificial intelligence (AI) company Prowler.io.

Valued at US$100 million ($136 million), following its most recent round of investment led by Tencent Holdings, along with participation from SGInnovate and Atlantic Bridge, Prowler.io uses AI to help turn dyna mic, real-time data into optimal decisions about business problems.

According to Dragon, Prowler.io’s AI platform and capabilities will greatly enhance decision-making in complex and uncertain environments that represent the type of transformational technologies Reefknot is committed to supporting to drive supply chain and logistics innovation.

Prowler.io’s mission is to turn dynamic, real-time data into optimal decisions about business problems with its AI-engine VUKU, which can process moving data in real time, adapt to uncertainty, act on sparse information and learn from experience.

This investment also coincides with the launch of a new think tank dubbed the Centre of Excellence for Global Emerging Supply Chain Technologies (GESCT), which aims to drive new business models and transformation in the industry.

Founding members include SGInnovate founding CEO Steve Leonard, Kuehne + Nagel head of global corporate development Simon Fich as well as Reefknot’s Dragon. Two others who signed on as individual members of GESCT are Wolfgang Lehmacher, former director and head of supply chain and transport industries at the World Economic Forum, and Kong Wai Wei, Starbucks Corp’s global supply chain director.

In a statement, the GESCT says it hopes to drive rapid learning and synergies through collaboration. One way it can achieve this is by holding regular forums to exchange ideas while monitoring technology trends, it adds.

Reefknot Investments to invest in start-ups in the logistics industry

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