Tradeshift Frontiers innovation lab hopes to drive blockchain adoption in the global supply chain
Tradeshift, a procure-to-pay supply chain management platform for SMBs and enterprise, announced Tradeshift Frontiers, an innovation lab and incubator that will focus on transforming supply chains through emerging technologies, such as distributed ledgers, artificial intelligence and the Internet of Things.
“The use cases we’re working through Frontiers cover a very wide variety of themes, including supply chain financing, asset liquidity, and supply chain transparency,” said Gert Sylvest, co-founder and GM of Tradeshift Frontiers. “There is so much more potential than just cryptocurrencies.”
In the supply chain, as on Tradeshift’s commerce platform, every interaction is based on questions of trust and transparency, which require strong business and governance models.
One of the best use cases for blockchain is supply chain innovation. Initial applications include Everledger’s blockchain application for the diamond supply chain to determine provenance, and the Estonia e-residency program powered by decentralized identity management. Blockchain’s shared ledger offers traceability and transparency — the features underpinning the business transactions and trading relationships that comprise our global supply chain.
Tradeshift’s quick ascent from a small Danish startup to a massive player in the global supply chain over the last eight years, on track to process US$500 billion in transaction value this year, could provide both a network adoption effect for technologies like blockchain across the global supply chain and valuable data at scale to transform supply chains.
According to Tradeshift’s CEO, Christian Lanng, Tradeshift already powers 150 out of the 500 Fortune 500 company supply chains. “The trade volume across Tradeshift’s platform is greater than the combined trade volume for Ethereum and Bitcoin combined over the last year, and that’s a huge portion of global GDP that can be made available for developers in the form of open-source data,” said Lanng.
There are hundreds of accelerators, labs and venture studios attached to major corporations, but Frontiers wants to set itself apart through an open-source ethos. Through providing developers with access to their aggregate open-source data, the ability to build third-party applications on their platform and sponsorship for published research, Frontiers can build the ecosystem around supply chain to ultimately benefit the industry and its position within the space.
The accelerator arm will include investments from Tradeshift and their ecosystem partners, joint ventures and licensing models.
Tradeshift is already sponsoring their first PhD in machine learning at Copenhagen Technical University. Initial research indicates that Tradeshift’s data set may even improve parallel decision-making, a current weakness of machine learning.
Of course, Lanng sees Frontiers and the open-source ethos as good business. “By giving our partners access to emerging third-party tech and industry research, we create the next generation technology alignment that creates more loyalty and alignment with our brand.”
Tradeshift’s business model departs from their main competitor SAP in their data-transparency, and ability to build upon their platform. In the supply chain innovation space, current blockchain logistics pilots by companies like IBM or Mercer are closed.
Overall, Frontiers is allowing developers to have access to open-source data with trade volume credibility, and the ability to develop third-party apps on their platform could be transformative for the global supply chain’s conscience and its bottom line.
Analyzing aggregate trade data allows businesses to see where data is being valued and produce greater economic benefit in the supply chain. For example, there is a strong corporate interest in resource management as pressure is placed on carbon outputs and in-demand resources like lithium-ion rise in cost.
A developer could use blockchain to build an app based on this data to extrapolate anyone’s carbon usage, pressuring companies to opt in and report their own to strengthen their brand. Aggregate data could also be used to help companies identify where they are using more resources than necessary, and manage and track them more effectively.
Last October, Tradeshift joined Hyperledger as a governing member, the Linux foundation’s open-source blockchain development initiative aimed to drive the development and adoption of blockchains across industry.
Tradeshift’s alignment with decentralization and open-source development dates back to the founders’ relationships prior to founding Tradeshift. In 2005, they built Easy Trade, the world’s first open-source, peer-to-peer trade platform, where they established some of the world’s first standards for digital trade.
“It’s our DNA and good business karma to make things open-source, so they come back to you,” said Lanng. “We don’t want the next generation of ideas to happen in a vacuum, because the whole industry benefits if the whole industry is lifted.”
“With Frontiers, we aim to bring the transformative potential of these technologies into the hands of every company in the network, no matter their size or role in the supply chain,” Sylvest said. “That also means unlocking greater value for small businesses and their trading partners to bring them on equal footing with the companies that dominate the digital supply chains today.”
Tradeshift, which launched as an e-invoicing platform in 2010, is now the world’s largest business commerce platform, connecting 1.5 million companies across 190 countries and transacting across 28 millions SKUs. The platform offers solutions for procure to pay, supplier engagement and financial services, and the ability to customize commercial apps on its business commerce platform. To date, Tradeshift has raised $182 million in venture financing, most recently in a $75 million Series D round in June 2016 led by Data Collective.
Frontiers could drive increased adoption of AI, ML and blockchain across global supply chains, and increase industry innovation, while positioning Tradeshift as an increasingly dominant industry leader in global commerce.
Featured Image: Martin von Haller Groenbaek/Flickr