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Supply Chain Start-Up Gets $8M Boost Sign Up to receive Daily News Alerts in your E-mail Inbox
Posted on Friday, September 01, 2006 4:15:00 PM |
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In another sign that the market for supply chain management software may be on the rebound, start-up vendor TrueDemand Software Inc. this week said it has received an $8 million, second-round venture capital cash infusion.The investment brings to $14 million the total venture capital raised by the year-old Los Gatos, CA, provider of supply chain planning, execution, and analytics software. The latest round was led by CMEA Ventures (San Francisco). Original investors in the company were Mayfield Fund (Menlo Park, CA) and Bay Partners (Cupertino, CA).TrueDemand's investment announcement followed an upbeat report from AMR Research this week predicting a more rapid rate of growth for the $5.6 billion supply chain management (SCM) software market, which in recent years has been essentially flat. AMR predicted that in 2006 the SCM software market will grow by 7%. Previously, the research company had forecast that the market would grow only 1% in 2005, but now says it actually grew 3%. Market growth, the report said, is being led by larger, public vendors such as SAP, Oracle, Manhattan Associates, and Logility and by a group of smaller vendors, including TrueDemand, that are focusing on specific vertical industries.In TrueDemand's case, the focus is on suppliers to food, high tech, and consumer goods retailers. The company's Forecasting and Replenishment Suite includes analytical products that use RFID, point-of-sale, and other demand-signal information to quickly produce forecasts down to the location and SKU level. TrueDemand will use the new cash infusion to keep up with growth by expanding its management team and services organization, said Eric Peters, the company's CEO. "Our products and messaging are starting to resonate with larger companies, but we need the ability to service them," Peters said.To date, TrueDemand has targeted larger manufacturers, and the company has entered into a string of important partnerships. Earlier this year, for example, VeriSign announced plans to integrate TrueDemand's forecasting tools with data from its own Intelligent Supply Chain Services platform. TrueDemand also has entered into agreements with IBM, Intel, and Alien Technology. Consumer products manufacturer Kimberly-Clark was an early customer.So far, Peters said, TrueDemand has fewer than 10 customers and about 30 employees.TrueDemand also plans to pour resources into extending its current product offerings, according to Peters. He said new features will enable manufacturers to plan and forecast the impact of marketing promotions and new product introductions."Our focus is on helping manufacturers drive top-line growth and market share," Peters said.Some competitors and analysts have predicted that best-of-breed vendors such as TrueDemand will disappear as larger, more well-funded enterprise software providers such as SAP and Oracle enter the market. Peters, however, said TrueDemand intends to coexist with its larger rivals, exploiting market niches that may initially be too small to interest the SAPs and Oracles of the world. In fact, he said, TrueDemand next week will announce its certification as an SAP NetWeaver certified partner.
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