San Francisco-based AI operations platform BackOps has raised $6 million to solve what its CEO has called a “$100 billion inefficiency” in manual logistics labor.
The latest round led by Construct Capital, along with existing investors Gradient and 10VC, brings the company’s total funding to $8 million in under a year.
According to a BackOps news release emailed to FreightWaves, the company aims to eliminate manual work and reduce error-prone processes through AI automation. BackOps is able to automatically handle routine order updates as well as complex, multi-system workflows like claims resolution and cross-platform coordination.
“Logistics operations are the heartbeat of every product-driven business, yet they remain shockingly manual,” said Sean McCarthy, co-founder and CEO of BackOps, in the release. “We started BackOps to change that. For the first time, the decades-long integration problem in supply chain can be leapfrogged using tools as simple as email and Slack, to drive real automation without heavy IT lifts. With this new capital, we’re doubling down on product innovation and expanding Relay, our AI-powered automation platform, to reach even more customers.”
McCarthy identified a number of logistics inefficiencies while previously working for e-commerce giant Amazon alongside its warehouse operations teams. That’s where AI comes to the rescue.
“What I saw was a staggering amount of manual effort workers toggling between spreadsheets, portals, and emails just to track a shipment, file a claim, or respond to a customer,” he told FreightWaves in an emailed statement. “That is a $100 [billion] inefficiency and one that AI is finally ready to solve.”
McCarthy told FreightWaves that since its founding last year, BackOps is already saving frontline teams three to five hours daily. In one warehouse, he said the company now automates over 80% of inbound customer inquiries.
“A leading 3PL cut its manual workload by 60%, saving the equivalent of three full-time employees while maintaining 98.3% task accuracy,” McCarthy said. “An industrials manufacturer slashed order inquiry times from 30 minutes to under 2 and improved [service level agreements] by 14 points.”
BackOps’ flagship automation product named “Relay” is designed to lightly integrate with existing tools like enterprise resource planning and warehouse management system platforms – all while being easy to adopt and scale over time.
The company aims to launch additional products to expand Relay’s capabilities from reactive to proactive automation.
“BackOps has an incredibly clear vision and a team that understands the pain points of logistics from the inside out,” said Rachel Holt, co-founder and general partner at Construct Capital, in the release. “The opportunity to bring intelligent automation to such a massive and underserved industry is enormous and BackOps is already delivering tangible [return on investment] to customers.”
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