Loop raises $95M to build supply chain AI that predicts disruptions

Supply chains are messy. San Francisco-based startup Loop isn’t content helping companies merely clean up their supply chains. Instead, the startup is using AI to offer companies predictive, and even prescriptive, remedies — almost like an ideal healthcare provider.

“I do an annual checkup, and it’s like, oh I should be walking more,” Loop co-founder and CTO Shaosu Liu said in an interview. “But that’s not the end goal, right? The end goal is someone teaching me about nutrition, someone teaching me about longevity.”

The approach helped Loop secure a $95 million Series C funding round from some high-powered Silicon Valley backers, the company announced Friday. The round was led by Valor Equity Partners and the Valor Atreides AI Fund, and includes investments from 8VC, Founders Fund, Index Ventures, and J.P. Morgan’s late-stage fund, Growth Equity Partners.

The funding comes at a time when engineering talent is one of the hottest commodities in tech. Both Liu and his co-founder (and CEO) Matt McKinney — who met while working at Uber — said they will deploy a lot of that capital toward hiring.

But it’s also a volatile moment for any company with a global supply chain, and that has helped drive investment into startups that are using AI to adapt.

Deliverr founder Harish Abbott raised an $85 million Series A round late last year to help automate work done by freight shippers and carriers. A startup founded by former Google and LinkedIn engineers called Amari AI came out of stealth in February with the goal of helping customs brokers modernize their out-of-date systems. And entrenched players like Uber Freight and Flexport are making big AI pushes as well. (Ryan Petersen, Flexport founder and CEO, is an early investor in Loop.)

Loop’s pitch is fairly straightforward. The company helps its customers take unstructured data — PDFs with no optically recognized characters, sheets of paper, digital messages — and give it structure, in order to automate tasks. Loop makes the automation possible by developing a harness that coordinates multiple AI models. Some are developed in-house, and others are frontier models.

This helps Loop customers better identify where they may be losing money or time, or spot the risks of over- or under-supplying a given product. Loop’s co-founders say the system is effective enough that it can save customers thousands of dollars pretty much right out of the gate.

But like Liu said, the goal is to go much further than that — predictive, instead of just diagnostic.

To accomplish this, Loop is starting to incorporate newer types of data from its customers. It’s integrating with customers’ enterprise resource planning software, transportation management systems, and hoovering up more data from suppliers, warehouses, and other interstitial components of the supply chain.

“Loop went deep into one of the hardest parts of the supply chain and turned it into an advantage for their customers,” Valor founder, CEO, and chief investment officer Antonio Gracias said in a statement. “Through the AI systems they’ve built, they’re taking data that was previously fragmented and inaccessible and are turning it into intelligence that improves cost, processes, and working capital. That foundation extends into other operational and financial functions, which is why Loop is positioned to become the intelligence layer of the entire supply chain.”

Liu sees Gracias’ support of Loop as major validation of the work his startup is doing, considering that Valor is one of the biggest backers of Elon Musk’s xAI. In a world where AI startups are constantly looking over their shoulders at the frontier labs while trying to dig a moat, Liu said Valor did “very deep diligence around how defensible” Loop’s business will be.

“They have access to the top AI researchers, and a visionary in the space,” he said, in a nod to Musk. “I think it’s very clear that no one’s really going after the domain we are going after with the same rigor, with the same talent.”

McKinney said he and Liu founded Loop on the assumption that the artificial intelligence technology required to do what they’re doing wouldn’t be the limiting factor. But he and Liu assumed the technology wouldn’t reach that tipping point until around 2030. Things are clearly moving faster.

That doesn’t bother him, he told TechCrunch. Instead, McKinney said it lets Loop focus on doing more for its customers — higher savings, lower risk, and broader resilience in an unpredictable world. And, of course, he thinks Loop customers are the ones who are most likely to develop into durable businesses regardless of how chaotic things are at a given moment in time.

“Our belief is that this is one of those points in time where the companies that really lean in, their advantage is going to compound. I think the companies you’re going to look at in the next decade that [survive] are the companies that really accelerated in this 12-month period,” he said.