Technology Investment as a Growth Driver

Investments in technologies are crucial for the longevity and sustainability of incumbent companies. However, to truly drive growth, one should invest in new technologies, and not just merely reinvest in fixed capital to achieve economies of scale. In the last couple of years, we have seen an uptick in investments, not only from Venture Capital funds but also from corporations alike.

Last month we spoke about how supply chain funding has increased proportionally relative to the total funding market. This month we will be focusing on Maritime Technology, a sub-vertical of the Supply Chain.

Current Maritime Trends

Source: Tracxn’s Maritime Tech Report November 2022

Albeit macro-economic uncertainty surrounding the market, funding into maritime technology has increased over time, with total funding up 17% YTD (from USD $336M to USD $396M YTD) since last year. Funding in this space has 7x since 2017 when it was a mere USD $53.9M.

Top Funded Small Cap Maritime Tech Business Vertical

Source: Tracxn’s Maritime Tech Report November 2022 - Last 1 Year Top Funded Business Models

The top business model that received funding in the maritime technology start-up space last year has been Underwater Ship Inspection ROVs, raising a total of USD $75.3M in the past year. These replace the need for human divers and have the advantage of being operated at extreme depths. Ship Emission Regulatory related start-ups received the second most funding at a total of USD $38M, in line with the new EEXI and CII standards that will come into place in January 2023. Analytics comes in at a close third place, with total funding being USD $34M, where monitoring and forecasting information is pivotal to decision-making in and offshore.

Source: Tracxn’s Maritime Tech Report November 2022

In the Mergers & Acquisition (M&A) maritime technology start-up market, acquisitions are flat, with USD $480M YTD invested in the space as compared to USD $507M in 2021. The biggest acquisition this year was MarineMax acquiring IGY Marinas for $480M. However, corporates have not just been looking at start-ups, there has been great activity outside the start-up space with CMA CGM Group acquiring cloud-based logistics technology platform Shipwire from Ingram Micro for USD $3B, to reinforce their exposure to a rapidly growing e-commerce space. Molslinjen acquired ForSea Ferries, a green ferry operator that has invested heavily in electric ferries for USD $1.1B. Furthermore, Alfa Laval, an engineering company has spared no effort in new technology investments - by acquiring analytics company BunkerMetric, weather intelligence solution StormGeo and owning part of technology company Malta Inc which develops new sustainable energy storage solutions.

While some companies choose to M&A, others choose a more collaborative approach by working together to co-develop technology solutions of the future. Japan’s Imabari Shipbuilding Co and industrial engineering Hitachi Zosen Corporation has entered into a joint venture to create a company focused on the development of marine engines that can run on alternative fuels. Trading giant Trafigura and data analytics company Palantir are working together to develop a platform aimed at providing carbon emissions visibility across commodities supply chains. Energy company Equinor ASA and oil and gas producer Wintershall Dea has come together on a Carbon Capture and Storage (CCS) project that is aimed at reducing greenhouse gas emissions.

The future we reimagine for the maritime and shipping industry is a visibly smooth and streamlined supply chain with technology that is resilient and sustainable. The question now is: How and what methods are you using to get there?

Hit reply and let us know. 

Save The Date

Motion Ventures is excited to catch our partners and friends at this year’s Smart Maritime Network conference in Singapore where General Partner Shaun Hon will share views on "Investment Into The Maritime and Logistics Sector" alongside James Ong from IMC Pan Asia Alliance Group and Nakul Malhotra from Wilhelmsen Group.

🗓️ Wednesday, 30th November 2022
⏰ 4PM - 4.45PM
📍 Parkroyal Collection Marina Bay @ Marina Square
🔗 https://lnkd.in/eYyxtSAR

Ventures in Motion will be taking a short break in December - sea you in 2023!