This article was published in Forbes January 31, 2022.
Supply chain is a web that spans so wide that many large corporations can’t easily track the entire life cycle for each of its products — let alone capture enough data to ensure that everything is being done to standards and protocol. Carlos Moncayo knows the system all too well as the former founder and CEO of ASIAM Inspector, a company that supports brands and retailers with sourcing operations in Asia, he did everything from inspections to auditing to sourcing. This gave Moncayo deep insight on the many layers of the supply chain and it wasn’t pretty. He noticed a lot of issues surrounding visibility. After 10 years with the company, he was surprised they hadn’t gotten any better.
“We thought with supply chain management and production chain management, the only way to solve [the issues] was to approach it from moving offline relations to online relations and helping companies make sense of the data coming out of that,” he tells Forbes. But at the time, no one was trying to tackle that, so the former founders of ASIAM decided to try it themselves. They launched Inspectorio in 2016 to help companies and brands move their supply chain online and have better visibility and data surrounding quality and sustainability. Since Inspectorio launched its first product in 2017, the company has expanded its product offerings and more than 7,000 customers including Target and Kohl’s have signed on.
The Minneapolis-based startup raises a $50 million Series B round led by Insight Partners with participation from Techstar Ventures, Matchstick Ventures and strategic backers including Flexport, among others, as originally reported in Midas Touch newsletter. Ryan Hinkle, a managing director at Insight, says the firm has been building a relationship with Inspectorio since the beginning of the startup’s life. While the investment could have been sparked by the company’s progress — Hinkle points to the startup’s 93% revenue growth in 2021 — for him it was a bit more personal. His family used to own a clothing store and he remembers helping unwrap shirts and using a measuring tape to ensure the sleeves were the same length and that the size labels matched when he was a kid. Both of which would fall under the quality control assurances Inspectorio looks to provide further down the supply chain.
“Who is responsible for confirming quality? Is it the factory’s problem? Is there a distributor? Is it their problem? As the retailer isn't it ultimately your problem? This product facilitates and certifies who is responsible for what with an audit trail,” Hinkle says. “It’s a whole lot more efficient and effective.”
The current product suite at Inspectorio covers three areas: quality, compliance and tracking. Through the three, companies are able to share data across their suppliers in real time which allows them to consistently be auditing. This, Moncayo says, is far more accurate than the old method of scheduled in-person audits that could be prepared for or even gamed. The constant monitoring helps companies maintain their quality standards more consistently while also allowing proactive workflow choices based on current data as opposed to reacting to past static sets. Inspectorio recently launched a new way for companies to also check if the underlying suppliers are sustainable or following ESG practices too; it also allows companies to compare their progress to other brands.
Hinkle and Moncayo credit the success of Inpectorio with its ability to scale by building networks. Retailers and brands that sign up for the startup, can invite their underlying factories and suppliers to join so they can share data and information, creating a chain reaction of customers. “There is this network effect from Inspectorio that creates value to each company’s supply chain,” Moncayo says. “The retailers, the brands, and the factory layer, they are all connecting and collaborating on data related to quality, sustainability and order tracking.”
Moncayo says that Inspectorio will put the funding toward continuing to expand its capabilities and diving deeper into where the supply chain market still needs visibility. He adds that they expect to double their revenue in 2022 but declined to share specifics. “Once you go to the other side you never go back,” Moncayo says on supply chain digitization. “You realize you can operate in a different way. We built innovations to allow companies a high level of visibility on their product chain.”