Vancouver-based Vistara Growth is increasing its US portfolio with investments in two companies offering artificial intelligence (AI)-based supply chain solutions for the retail and consumer packaged goods sectors.
Vistara invested $20 million USD into Michigan-based Algo and participated in a $40-million USD growth financing round for Maryland-based Impact Analytics. According to Vistara partner Noah Shipman, Algo is the first of three deals it has already closed from its fifth private credit fund, for which it recently closed $200 million. Vistara’s investment in Impact Analytics comes from reserved capital in its fourth fund, according to Shipman, and follows an initial investment completed in June 2023.
Vistara typically provides growth capital to enterprise SaaS companies to help them finance organic growth, mergers and acquisitions, or shareholder liquidity initiatives.
The firm targets B2B SaaS, artificial intelligence, and cloud infrastructure businesses with between $10 million and $100 million in annual recurring revenue (ARR). Vistara typically invests in venture-backed tech companies in the Series B stage and higher, but also supports firms that have taken alternate funding journeys, such as bootstrapped firms.
Shipman told BetaKit both companies fit Vistara’s target verticals and ARR, noting the firm is increasingly seeing AI-driven opportunities across its target vertical and supply chain companies.
With the recently completed first close of Vistara’s Fund V, which has a target of $540 million, Vistara plans to write bigger investments than its past funds, backing up to 24 companies with cheque sizes ranging between $10 million and $30 million over the next two and a half years. The fund will be split between the US and Canadian markets on a 70-30 basis, respectively.
Algo, which counts Microsoft, Meta, and Walmart as clients, says its platform aims to enable retailers, suppliers, distributors, and manufacturers to gain insights into demand planning and inventory optimization processes.
Using AI and machine learning in its omnichannel SaaS platform, Algo claims suppliers and retailers can plan, simulate, and execute their supply chains with automation, analytics, and digital twin technology.
Algo said its funding from Vistara helped complete its merger with V Net Solutions in December, and will provide the company with further growth and acquisition capital.
“We are excited to partner with the company’s CEO, Wayne Sim, and the entire Algo team as they further consolidate the fragmented supply chain software industry, expand their offerings, and onboard additional retailers and merchants looking to modernize their operations,” Shipman said in a statement.
Impact Analytics also provides AI-powered demand forecasting for supply chains with a similar target market. It says its ForecastSmart solution can analyze market conditions to flag the effects of events, price changes, promotions, and coupons to help with accurate forecasting and planning.
Impact Analytics’ latest funding round was led by Sageview Capital. Vistara did not disclose the amount invested in this funding round, but noted it was within its standard $10 million to $30 million range. Impact Analytics will use the fresh capital to expand its team, deepen strategic partnerships, and strengthen its balance sheet.
Shipman noted that Impact Analytics is more focused on life cycle pricing and allocation, while Algo is more focused on inventory and distribution planning and execution. However, he added that both companies are using machine learning to increase automation and forecasting in the supply chain sector.
“We believe their customers are in the process of upgrading their systems and will look to AI to improve their operations and these companies are leading players in adjacent but distinct parts of the supply chain,” Shipman told BetaKit in an emailed statement.
Vistara told BetaKit it will be announcing two more investments from Fund V in the coming weeks.
UPDATE (01/18/24): This story was updated with additional information shared by Vistara partner Noah Shipman.
Feature image courtesy Algo via its website.