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Countless supply chain executives currently report the dichotomy of healthy but elongated sales pipelines, as prospects delay new software investments until they gain clarity on the transformative impact of artificial intelligence (AI). This backdrop is simultaneously attracting ample venture and growth capital while also tempering M&A activity, as investors and strategic buyers look to capitalize on numerous macro tailwinds.
The first new wave of supply chain software innovation in 25 years is underway, as non-deterministic approaches proliferate, and planners and executives move away from traditional scenario-based orchestration, hamstrung by limited inputs, data and time. AI removes natural limitations in the number of scenarios and testing available to users, and has the power to incorporate heretofore underutilized and unreachable data that allows the exploration and optimization of countless scenarios, thereby uncovering new opportunities. While there is unquestionably long-term potential for AI to transform supply chains, we have yet to see mass-market adoption or complete re-architecting and replacement of core systems. Many enterprises remain cautiously optimistic as they evaluate key pain points and strategic roadmaps for incorporating AI.
M&A and Private Equity: Betting on Supply Chain Software
In the first nine months of 2025, strategic acquirers and private equity firms have aggressively pursued companies in rapidly evolving software verticals, a trend that will likely continue for the rest of 2025 and into 2026. During the twelve months ending Q3 2025, the 400+ companies included in BGL’s Supply Chain Technology Market Map recorded 78 transactions totaling $7 billion in capital invested. While deal volume increased modestly from 73 transactions in the prior-year period (Q3 2024), total capital invested increased around 15% from $6.1 billion. This reflects continued strong investor appetite for larger-scale transactions and high-value opportunities across the supply chain technology ecosystem.
The current volatility and pervasive supply chain disruptions are a bright spot for companies operating in the sector. These companies tend to have mission-critical value propositions that drive enduring customer use across all market cycles. Tariffs and broader trade friction are also exacerbating what was already a complicated user experience for international shipping. With trade policy and the geopolitical environment constantly shifting, having intelligent planning, trade compliance and predictive forecasting can help preserve margins in a down market.
Companies such as private-equity-backed Zonos, which automate cross-border tax and duty calculations for e-commerce businesses, are benefiting because their technology can be easily integrated into the e-commerce checkout process to drive transparency into landed costs, customs documentation, and local duties and shipping costs.
Key acquisitions also illustrate private equity’s focus on the value of supply chain software companies with vertical expertise. Banneker Partners’ strategic growth investment in Arkieva, a provider of supply chain planning software solutions, highlights the growing importance of planning systems in today’s complex supply chains. The investment will enable Banneker Partners to implement a robust value creation plan to scale its deep industry vertical expertise to clients across the chemical, food and beverage, and consumer products sectors.
Other notable recent deals include Greenscreens.ai acquisition by Triumph Financial. As the U.S. freight industry expands and grows increasingly complex because of rising shipping volumes, freight brokers and carriers increasingly become vulnerable to thinning margins in freight pricing. This, in turn, has driven demand for solutions to help mitigate these risks, and provide performance-based intelligence for pricing and revenue optimization.
WiseTech’s $2.1 billion acquisition of e2Open solidifies WiseTech’s footprint as a multi-sided marketplace that connects trade and logistics stakeholders, and establishes significant market share in the U.S. with more than 5,600 customers and 500,000 connected businesses.
Tive raised $40 million in a Series C led by WiL and Sageview Capital, positioning the company to accelerate the growth of its shipment visibility technology. The transaction represents a growing chorus of companies that are leveraging IoT tracking hardware to generate proprietary data to feed into advanced analytics and AI systems.
Earlier this year, SPS Commerce, a retail supply chain network, acquired Carbon6, a provider of specialized revenue recovery and procurement management solutions for Amazon sellers.
Tailwinds Creating Demand
This sector benefits from cost-efficiency initiatives tied to the globalization of the supply chain and an emphasis on nearshoring, as well as the appetite from companies willing to invest in solutions that help mitigate supply chain and labor challenges. Nearly two-thirds of global trade teams are already using software to analyze alternative trade lanes, and over half are using tools to identify lower-cost routes, and map end-to-end supply chains, according to the Thomson Reuters Institute Survey.
AI is yet to become a defining technology within the supply chain space, given disparate data silos, deficient expertise amongst users, and highly calibrated and company-specific workflows. While we do not doubt that AI will increasingly dominate product roadmaps, influence acquisition strategies, and quickly disrupt the current balance of power amongst technology platforms, we are only at the initial innings of adoption.
Three trends are driving the majority of market consolidation across the supply chain software sector:
Cloud migration. Surprisingly, large portions of the economy still rely on spreadsheet-based internal systems to manage supply chains. The trend of moving to the cloud is the biggest growth driver across all sectors as companies modernize data and operational infrastructure. Companies that are still using legacy systems are reaching an inflection point, and must decide whether to move off old systems or onto a cloud-based solution. When considering making the switch, they use this as an opportunity to evaluate their current vendor’s ability to meet future needs. The relative recency of AI technology is further complicating this evaluation process, as companies evaluate the true cost of retrofitting cutting-edge technology onto legacy data infrastructure.
Specialization in end markets. Companies with expertise in a specific industry vertical, such as specialty chemical, retail or complex manufacturing, bring specialized knowledge and tailored technology that make them highly attractive to customers and investors alike, because they are craving more specializations in favor of generalized solutions.
Shift to best-of-breed platforms. All-in-one platforms that rely on extensive configuration and customization to meet customer needs have historically captured the majority share of the enterprise market. These multi-function systems are typically significant multi-year investments for companies who seek to serve many capabilities across corporate, business-unit and site-level needs. Enterprise technology buyers have historically tended to favor the benefits of an integrated, “one throat to choke” solution, at the cost of industry specialization and flexibility. The highly dynamic operating backdrop has driven dissatisfaction with these legacy providers, while the increasing proliferation of modern supply chain data orchestration capabilities has created the opportunity for best-of-breed, specialized solutions to emerge and quickly gain market share without requiring complete system-level purchases.
Looking ahead, we expect supply chain technology to remain a priority for both enterprises and investors. M&A activity is not roaring back, but it is clearly on the uptick, with buyers allocating capital to acquisitions in a discerning yet deliberate way. While buying decisions may take longer as organizations balance implementation challenges and broader market uncertainty, the underlying demand for technology tools that enhance resilience, visibility and operational efficiency is only set to increase. Strategic acquirers and private equity firms will continue pursuing differentiated and well-scaled opportunities in this space, reinforcing the long-term thesis that supply chain planning and execution platforms are indispensable when it comes to navigating a more dynamic and interconnected global economy.
Scott Mattson & Michael Magruder are managing directors at BGL.
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