This week, Oak announced that we have invested $100M to support the launch of Auger, Dave Clark’s new company that is positioned to redefine supply chain management. The company is creating a unified software platform that will help customers in the defense, tech and government sectors manage planning, forecasting and financing in real-time, concurrently. Auger’s AI-native operating system will be designed to integrate data from disparate sources into a single database, deliver automated insights and optimize real-time decision-making so that teams can focus on higher order tasks – and not the supply chain trouble-shooting basics.
Auger, which refers to the tool that is used for boring holes into hard substances to break up blockages or improve flow, stands to change the way companies think about their supply chain management tech stack. Today, companies are forced to piece together information from multiple platforms, often using Excel as their primary tracking tool. With Auger, organizations will be able to rely on a single system for all their needs – across forecasting, inventory management, planning and more.
Part of why we are so excited about Auger is that it will be one of the first AI-native supply chain management software platforms, meaning the data sets it’s leveraging are already largely in the cloud (or otherwise, will be able to access) – making it easier to apply various ML, neural network, and LLM solutions that can automate workflows and elevate insights. Being purpose built removes any technical debt that has historically plagued this industry and creates a unique opportunity for a moat.
When it comes to the team at Auger, Dave is a truly exceptional founder, and we can’t express how fortunate we feel to be building this company with him. With his experience at Amazon and then Flexport, he’s bringing the lessons of the consumer supply chain management space to other, more complex sectors. During his time at Amazon, Dave led over $600B in gross merchandise sales. He is known for revolutionizing Amazon's supply chain with innovations in robotics and AI, building a logistics network that surpassed competitors like FedEx and UPS. Perhaps most importantly, he has firsthand knowledge of how the antiquated systems work, where they can be optimized and where cloud-native products can be best inserted to meet modern day needs.
With Auger, Dave will combine his track record of implementing cutting-edge technologies in the supply chain management process with his experience in M&A to scale rapidly. We first got to know Dave as a part of our diligencing the broader space of supply chain management and financial management software. During that time, we recognized his clear desire to get back to building and finish what he started earlier in his career – truly fixing a broken supply chain management system. We believe that with Auger, he’s best positioned to solve these problems.
Moreover, we think there is a real void in the market for the product. While countless point solutions exist, no one has built the control tower overseeing the end-to-end process – including sales and operational planning, TMS, demand planning, digital transactions, procurement and vendor risk. With the rising costs in labor, efficiencies in other parts of the supply chain management system are more important than ever. That, coupled with the cloud transition of ERPs and TMS information, has created a “the time is now” moment for this type of solution.
One question we have been getting at Oak is “are you all expanding beyond healthcare and fintech with this investment?” The short answer here is no.
At Oak, we definefintech differently than the traditional concept many think of. When we think about investing in fintech, we actually think about investing across four horizontal markets:
- Financial services infrastructure: Here, we look to invest in infra companies that enable the ease of embedded finance, financial management and business automation. This includes infra that enable B2B payments, credit issuance, etc.
- Application software: We define application software in this space as SaaS companies looking to support business automation, financial planning and financing to speed up time from order to payment across sectors.
- Commerce enablement: For this area, we look for companies that address the sales growth and enablement of omni-channel commerce. There is a shift to selling verticalized systems of records and workflow platforms for merchants and attaching financial productsthat we see huge potential in. Our investments in this space will benefit from the proliferation of mobile and advancement in AI.
- Fraud, risk and identity: Fraud continues to increase across financial services, which requires unique solutions and distribution approaches. Here, we are looking for differentiated platforms that have a proven ability to reduce fraud pressures and drive revenue opportunities.
And, of course, with AI, we are interested in vertical applications across all these areas that can uniquely address the challenges the industry faces across sales and marketing, operations and fraud detection and management.
When we think about how this thesis applies to Auger, we primarily think about the financial infrastructure of supply chain management. The challenges in supply chain management are huge and the opportunities – particularly in SaaS and infra – are massive and align well with our fintech thesis. Specifically in financial infrastructure, transactions are still largely manual and prone to errors. There is a clear opportunity in the sector for more SaaS and AI – and we think Auger is uniquely positioned to address the infra brittleness with its AI-native approach. Because money moves through supply chains in such an antiquated way, improvements to inventory management and forecasting clearly have the ability to make things more efficient. Perhaps more interesting to us isthat this visibility has the potential to even accelerate the movement of goods through the supply chain as payments move to a more real-time state. And we are so excited to see what Auger can do here to reshape the industry.