Project44 Inc., a $1.2 billion startup that helps enterprises monitor their supply chains, is acquiring fellow supply chain monitoring provider Convey Inc. in a $255 million transaction.

Announced today, the deal is Project44’s third acquisition since the beginning of the year and its largest so far. The startup previously acquired San Francisco-based ClearMetal Inc. and Germany-based Ocean Insights GmbH. Like Convey, both firms developed software products designed to help companies track their logistics networks.

Enterprises such as retailers are increasingly prioritizing the supply chain as part of their digital transformation initiatives. To improve efficiency, companies are rolling out analytics tools that can process the large amounts of data generated by their logistics networks to identify issues and cost savings opportunities. Project44 is one of the largest players in the market: It claims to be the leading supply chain visibility provider both by annual recurring revenue and the number of customers using its software.

Convey, meanwhile, is a venture-backed startup that competes in the same market but has a narrower focus. Whereas Project44’s software helps enterprises monitor their entire logistics networks, Convey focuses on providing companies with visibility into one segment of the supply chain in particular: the so-called last mile. That’s the industry term for the routes through which orders are delivered to customers’ homes from a company’s fulfillment center.

Convey provides a cloud service that helps enterprises find opportunities to reduce the costs of last-mile delivery and shorten package arrival times. A machine learning system built into the service automatically calculates when each package will be delivered. According to Convey, the same system is capable of sending customers notifications if their order are expected to arrive late because of an unforeseen supply chain delay.

“The stakes are high for companies to not only fulfill and ship orders but to make the right promises about availability and delivery,” said Project44 founder and Chief Executive Officer Jett McCandless. “However, volatile conditions, overwhelming complexity and blind spots in the supply chain make this difficult to achieve.”

Project44 will integrate Convey’s features for monitoring the last mile of supply chains into its platform to provide customers with more detailed information on their logistics operations. Convey designed its platform mainly for consumer brands and counts more than 200 such companies, including Home Depot Inc., as customers. Project44 sees an opportunity to adapt the startup’s platform for use in the business-to-business transportation segment to help optimize the supply chains of enterprises that sell goods to other companies. 

“Salesforce, Google and Adobe have transformed virtually every aspect of the digital customer experience through visibility and intelligent decisioning in the shape of marketing automation, targeted advertising and personalization,” said Convey founder and CEO Rob Taylor. “Now with Convey, project44 is bringing this approach and cutting-edge technology to the most complex customer experience challenge yet: the supply chain.”

The supply chain software market in which Project44 competes has become more competitive this year as a result of key market players raising new funding. In May, FarEye Inc. closed a $100 million investment to expand the adoption of its cloud-based cloud platform, which uses machine learning to help enterprises optimize their logistics operations. In March, supply chain monitoring startup FourKites Inc. raised a $100 million funding round of its own.

The growth of supply chain software startups is likely driven in part by the e-commerce sector. The increasing popularity of online shopping is giving e-commerce companies more reason to invest in new technologies that can help them provide a better customer experience and gain an edge over rivals. Traditional retailers are also enhancing their digital capabilities to address the increased demand.

Image: Project44