The logistics technology market comprises businesses involved in the development of software for logistics and supply chain applications. Players typically also provide associated hardware (e.g. GPS trackers) and services (e.g. maintenance), serving as one-stop-shops. We segmented the European market by offering into (i) fleet telematics, (ii) logistics-focused ERP, (iii) transport management software and (iv) parcel delivery and e-commerce software.

Overall, the European logistics technology market remains fragmented. Large international players lead the pack in more mature segments (e.g. transport management software), with smaller local champions and incumbents with specialised niche offerings (e.g. post-purchase logistics software) making up the remainder of the competitive landscape. Consolidation has been picking up in recent years as scale becomes increasingly important in this winner-takes-most market. In the long run, the anticipation is that non-differentiated mid-market players will be pushed out of business, while giants and niche specialists will retain their right to exist (interview by Gain.pro).

Investor-led interest has been significant with ~80% of identified European assets backed by financial sponsors (July 2022). Strong top-line growth prospects, high customer stickiness and the potential for buy-and-build plays are considered to be the most attractive factors for investors. Typical EV/EBITDA multiples can amount to as much as ~20.0x for established companies.

Logistics technology players can play an important role in optimising their customers’ carbon footprints. Logistics software systems allow for real-time data insights which, in turn, can optimise routing and therefore reduce unnecessary fuel consumption and environmental pollution through more efficient logistical processes. At the same time, the industry will need to address the structural shortage of skilled IT specialists, with such talent simply being necessary to keep pace with the industry’s technological developments.