The DeCline in Postpandemic Logistics Funding Continues. After Reaching An University $ 2.9 Billion in 2023 — A Two-Year Plunge of Nearly 90 Percent, and the lowEVEL of Funding Since 2015A number of factors are driving this sharp pullback by Investors, Including High Interest Rates (Which Curb Ventment in Generat), A Global Slowdown In the s Hipping Industry (As Consuamers Shift Spending Away from Physical Goods Toward Services), and a Market inWhich Excess CapaCity AMONGO Carriers is Driving down Freight Rates. In A Nutshell: Venture Capitalist (VCS) and Logistics Entrepreneurs are defired with theVaranasi Investment. Reversal of Many of the Trends that fueled the covid-19-Era Boom.

Globally, VC Funding Across All Industries Fell Some 35 Percent from 2022 to 2023, Our Analysis Found. or accounting for 0.8 Percent of Total Ventments in 2023 -DOWN FROM ROMHLY 3 Percent in theFIVE PRECEDING Years (EXHIBIT 1), as the Industry Grables with a Drop in E-Commerce Growth, Falling Trade Volumes, and Volatile Freight Rates.

BEFORE The COVID -9 Pandemic, E-COMMERCE SPENDINDINDINDINDINDEN GOEN GROWING AN Annual Rate of 10-15 Percent, Accelerating to 29 Percentth in 2020. While the e-Commerce Market C Ontinues to grow toDay, it has ben doing so at aSlower page, with annual geate of approximately 5 percent. The decline in demand for physical goods, een 2022 and 2023, Sea Freight Volumes Stagnated, with 0 Percent Growth, While Air Freight Volumes DecreasedBy 4 Percent. Decling demand is also reflected in global file Actors such as rising fuel prices, port content, and support chain disruptions — FELL SOME 70 to90 Percent, as capacity RETURNED to the Market.

Much of the Venture Capital Flowing Into The Industry Is BEINELED Into the Last-Mile Sector — the Companies that Specialize in The Final of the Delivery OCESS (EXHIBIT 2). Last-Mile Start-UPS Increased their Share of Total Funding in LogisticsBy Five Percentage Points Between 2022 and 2023. The last-mile Start-UPS Garneric Ived $ 330 mission; XPressBees, An Indian Express Logistics Provider, Which Raised $ 120 Million;And logistics provider delhevery, also from india, which raised $ 114 mission.

Software and Systems Start-UPS ALSO SAW Their Share of Vc Funding Increase Over THE PAST TWO Years, Despite This Small Market Size, Due In Large PART TO The Logistics Industry's Growing Demand for Digitalization and AI SOLUTIONS. Start-Ups with Software-BasedBusiness Models -PARTICularly Those with a Transparent Revenue Stream from Subscriptions -Also Are Proving Attractors.

Examining the data by region revers that north American Start-UPS CAPTURED The MOST Investors in 2023. They account of 43 Percent of Total Funding, UP FRE OM 30 Percent IN 2022 (Exhibit 3). This Marks A Shift from Years Past, When Past, WhenAsian start-ups (excluding this in China and India) Garnered the most function.

Indian Start-UPS SAW Their Share of Total Funding Nearly Double Between 2022 and 2023, Rising to equal EUROPE's Share. India has benefited from companies Ing their manuFacturing and Supply Chains. The Trend Has Aided India's Efforts to Attract Foreign Investment and Become A Preferred ManuFacturalingDestInation.Kanpur Investment

Overall, Confidence Remains that Logistics Sector Funding Will Return in the Long Run, GIVEN that it account account of GDP.

There are implications for start-ups, Investors, and incumbents on how to navigate they can environment. For start-ups, Focusing On A Realistic Path to Profitability It will be critical. Growth will always be a key considation, but in an indullry marked bySIGNIFICANT COST PSSSURES and Fragmentation, Entrepreneurs Should Expect that Investors Will Demand Financial Viability Sooner than Later. ISTIC Opportunities to Evaluate More Excition Valuations Can Be Expected. Partnering with Start-ups that needing and Pursuing M & A-Powered Innovation orTalent Acquision Can Lead to Substantial RETURNSPune Stock. Incumbents Also May take the opancetunity to giveth initative Increased Focus On Digitization, Driven by In-House Efforts, Means Incumbents Can Develop their Own Innovative Products And Solutions While Collaborative with A gilestart-ups.

Despite the Current Challenges, there is state considrable potential in the LogisticS sector. As confidence RETURNS and Entreprenes and Investors Find A NEW Val Val Val Val Val Val Val Val Val Val Val Val UATION MIDIDLE GROUND, Start-UPS Will Likely Attract More than 1 Percent of Total Vc Funding, as they have in years pass. What's more, given the backlog in innovation and technology, VC Investment Share in the Space Could Surge Evening More, Eventual Catching up to the 10 Percent Level T he indissry controls to gdp.