Supply chains are messy. San Francisco-based startup Loop isn’t content with helping companies simply clean up their supply chains. Instead, the startup uses AI to offer predictive or even prescriptive remedies to businesses, almost like an ideal healthcare provider.
“I do an annual review, and it’s like, oh, I should walk more,” Loop co-founder and CTO Shaosu Liu said in an interview. “But that’s not the end goal, is it? The end goal is for someone to teach me about nutrition, for someone to teach me about longevity.”
That approach helped Loop secure a $95 million Series C funding round from high-profile Silicon Valley backers, the company announced Friday. The round was led by Valor Equity Partners and the Valor Atreides AI Fund, and includes investments from 8VC, Founders Fund, Index Ventures and JP Morgan’s late-stage fund, Growth Equity Partners.
This funding comes at a time when engineering talent is one of the most sought-after commodities in technology. Liu and his co-founder (and CEO) Matt McKinney — who met while working at Uber — said they would put much of that capital toward hiring.
But it’s also a volatile time for any company with a global supply chain, which has helped spur investment in startups that use AI to adapt.
Deliverr founder Harish Abbott raised an $85 million Series A round late last year to help automate work done by shippers and freight carriers. A startup founded by former Google and LinkedIn engineers called Amari AI came out of stealth in February with the goal of helping customs brokers modernize their obsolete systems. And well-established players like Uber Freight And Flexible port are also making big efforts in AI. (Ryan Petersen, founder and CEO of Flexport, is an early investor in Loop.)
Loop’s pitch is quite simple. The company helps customers take unstructured data (PDFs without optically recognized characters, sheets of paper, digital messages) and structure them to automate tasks. Loop makes automation possible by developing a harness that coordinates multiple AI models. Some are developed in-house and others are pioneering models.
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This helps Loop customers better identify where they may be wasting time or money, or spot risks of over- or under-supply of a given product. Loop’s co-founders say the system is efficient enough to save customers thousands of dollars upfront.
But as Liu said, the goal is to go much further than that – predictive, rather than simply diagnostic.
To do this, Loop is starting to integrate new types of data from its customers. It integrates with customers’ enterprise resource planning software and transportation management systems and pulls in more data from suppliers, warehouses and other interstitial components of the supply chain.
“Loop has penetrated deep into one of the most challenging parts of the supply chain and turned it into an advantage for its customers,” Valor founder, CEO and chief investment officer Antonio Gracias said in a statement. “Through the AI systems they have built, they transform previously fragmented and inaccessible data into insights that improve costs, processes and working capital. This foundation extends to other operational and financial functions, which is why Loop is able to become the intelligence layer of the entire supply chain.”
Liu sees Gracias’ support for Loop as a major validation of the work his startup is doing, given that Valor is one of the largest backers of Elon Musk’s xAI. In a world where AI startups are constantly looking over their shoulders at frontier labs while trying to drive a wedge, Liu said Valor has done “very thorough diligence on how Loop’s business would be defensible.”
“They have access to the best AI researchers and a visionary in the field,” he said, in a nod to Musk. “I think it’s very clear that no one is really tackling the area that we’re looking for with the same rigor, with the same talent.”
McKinney said he and Liu founded Loop on the assumption that the artificial intelligence technology required to do what they were doing wouldn’t be the limiting factor. But he and Liu thought the technology wouldn’t reach that tipping point until around 2030. Things are clearly moving faster.
It doesn’t bother him, he told TechCrunch. Instead, McKinney said he’s letting Loop focus on doing more for its customers: higher savings, lower risks and broader resilience in an unpredictable world. And, of course, he believes Loop’s customers are the ones most likely to become sustainable businesses, regardless of the chaos that reigns at any given moment.
“Our belief is that this is one of those times where the companies that are really stepping up are seeing their upside increase. I think the companies that you’re going to see over the next decade that (survive) are the ones that have really accelerated over this 12-month period,” he said.