Operator-led investing provides startups unmatched industry expertise

The supply chain is a complex network of moving parts. Operator-investors who understand the industry and who have helped grow other high-revenue companies can provide the insight needed to propel a company to new heights.

NewRoad Capital Partners is one investment firm filling this need. It is an operator-led, demand-driven private equity investment firm with a focus on the lower middle market. 

“The role of NewRoad is to pour gasoline on the fire to help the company grow exponentially based on our backgrounds, our experiences and our connections in the market,” Chris Sultemeier, an operating partner at NewRoad, said.

NewRoad’s verticals include supply chain and logistics, retail technology and consumer packaged goods, and marketing technology. The firm focuses on making minority investments in high-growth, high-demand companies that are typically in series A or series B funding stages.

Although many companies are competing to solve the same problem, NewRoad’s operating partners use their industry expertise to pinpoint the company with competitive advantages that set them apart. 

Right now, Tracy Black, partner, and Sultemeier see technology as a sector with plentiful opportunities for investment.

“A lot of companies don’t have the ability to invest in technology. It’s just a very ripe industry for outside investment in technology to have a big effect,” Sultemeier said.

Trends NewRoad is seeking out now include:

• Supply chain visibility/track and trace.
• Document digitization and automation.
• Reverse logistics.
• Micro-fulfillment.
• Warehouse technology and automation.
• Transportation management systems.
• International supply chain — drayage.

NewRoad’s seven operating partners have decades of experience in leadership positions at the executive level of some of the biggest companies in the supply chain, including Walmart, J.B. Hunt, General Mills, Family Dollar and StarCom Global. Their high-level industry experience helps identify companies with growth potential.

Sultemeier and Black each have 30 years of experience in leadership and the supply chain. In leadership roles at Fortune 500 companies, Black and Sultemeier were often the targeted customers of the companies they now invest in.

Sultemeier served previously as president and CEO of Walmart Transportation LLC and as executive vice president of logistics at Walmart Stores Inc., a position he held from 2011 to 2017.

His focus at NewRoad is operations-based. At NewRoad, he serves as chairman of the board of Platform Science and on the board of NYSHEX as well as a board observer of WorkStep. He also serves on two public boards, Duke Realty and Yellow Freight.

Black was at J.B. Hunt for 28 years, serving for 12 years on the executive team as senior vice president of IT, leading strategies for mobility, telematics, cloud migration, digital transformation, analytics and software development.

Her investment focus at NewRoad is on technology companies within logistics and supply chain. She serves on the boards of Platform Science, Emerge and as chairman of the board of Pickup. In her new role as Partner of the firm she will also lead the operating partner team at NewRoad.

“Our backgrounds help give credence to the voice of the customer to the startup founders that are coming to us,” Black said.

Their unique perspectives at the intersections of leadership, investor and customer mindsets can provide valuable insight to help position the companies they invest in for success.

“We sit down with the operating partners twice a year and map out the industry sectors to determine ‘Where are their biggest pain points? Where are their problems and opportunities for investments?’” Black said.

Both Sultemeier and Black participated in major growth at Walmart and J.B. Hunt, respectively, giving them ample experience in what it takes for a company to scale into a massive presence in the industry.

As Walmart’s EVP, Sultemeir’s responsibilities centered on the physical movement of products in the areas of transportation, trucking, warehouses and fulfillment centers. In this position, he supported Walmart in all of its retail divisions, including Walmart stores, Sam’s Club, e-commerce and international operations.

Sultemeier has seen Walmart grow exponentially over the last 30 years. As of 2021, Walmart is the top wholesale/retail carrier in the U.S. and is among the top 25 private fleets with 7,400 tractors.

When Black first began at J.B. Hunt, she was just the 20th employee in the IT department and the company had 500 over-the-road trucks. Black was there as the company grew its intermodal business segment, dedicated private fleets, brokerage and final-mile home delivery. Today, J.B. Hunt has a fleet of over 19,000 tractors and is the fourth-largest trucking company in the U.S. 

“That background gave me the experience in building and scaling teams and building software and technology for each of those business segments as they grew,” Black said.

Click here to learn more about NewRoad Capital Partners.

Source: freightwaves - Operator-led investing provides startups unmatched industry expertise
Editor: Jenny Glasscock