Maritime technology has never before attracted so much investment from venture capital highlighting its future importance to ship optimisation and global logistics
Around US$1.14Bn in venture capital was invested in maritime and digital freight forwarding technologies in 2019, a huge leap from just US$190M in 2018.
This is driven by expectations in maritime industries of growing adoption of digitalisation, internet-of-things (IoT), artificial intelligence (AI), virtual reality and simulation technologies for ship and logistics optimisation.
This massive rise in investment is due to breakout stars beginning to scale up their business and attracting significant amounts of investor money. It also demonstrates rising interest in maritime technologies with potential for saving shipping companies money and air pollution emissions.
According to a report by technology research and innovation consultancy Thetius, there has been a 60% increase in the number of venture funds dedicated to maritime, logistics and trade operating around the world in the last 18 months.
Companies offering application integration, IoT, AI and greentech should expect considerable investor interest as these trends are set to have the biggest impact on maritime industries in 2020.
Trade facilitation start-ups dominated investor interest in 2019 with technology providers for improving ship operations, ship management and port management receiving larger amounts of funding.
In 2019, venture capital funding was dominated by investment in Flexport, led by Softbank’s Vision Fund. US$1Bn was invested in digital freight forwarder Flexport with significant participation from existing investors Founders Fund, DST Global, Cherubic Ventures, Susa Ventures and SF Express.
Flexport services almost 10,000 clients and suppliers across almost 110 countries and had revenue of almost US$500M in 2018. It has 11 offices and warehouses around the world.
Outside this US$1Bn investment, around US$144M was invested in start-ups in 2019 and the average deal size increased by 18% from US$2.2M in 2018 to US$2.7M in 2019.
New technology providers are also beginning to gain business from shipping companies through deployment within IoT platforms, such as Inmarsat’s Fleet Data and Kongsberg’s Kognifai.
Thetius founder Nick Chubb thinks maritime technology markets are maturing with fewer deals attracting higher investment.
“After years of seed and small venture rounds dominating funding activity, a few breakout stars are beginning to scale and have enough traction to warrant taking significant amounts of investor money,” he said.
He expects new entrants to attract more small venture funding in 2020 and start-ups in the last few years to attract larger volumes of investment.
Riviera Maritime Media is a conduit for maritime technology start-ups and investors through its series of Optimised Ship Forums and other industry conferences in 2020