- Startups and scaleups driving more investments in the shipping sector.
- Despite this, venture funding in shipping has decreased by 24%
- The average size of deals has increased but the number of deals made has declined.
- Decreased investments and increased average size show the market is steady and mature.
- The focus is on technology, innovation, and logistics as venture funding is increasing in these areas.
- With Greentech, AI and other technological innovations in the horizon more investments are forecasted
As per a report launched by Thietus, technology research and innovation consultancy, over $1 billion were invested in technology companies working in the maritime sector in 2019, says an article published in Safety4Sea.
What does it say about investments in Shipping?
- Accordingly, the report highlights that startups and scaleups collected $1.14 billion in the shipping sector, playing a major contribution in the economy.
- Yet, Thietus focuses on the $1 billion investment in Flexport, led by Softbank’s Vision Fund.
- Therefore, if Flexport’s contribution is removed from the figures, venture funding in the industry actually declined by 24%, from $190m in 2018 to $144m in 2019.
- Overall, 8% fewer deals were made through the year compared with 2018, though the average size of deals has increased by 18% from $2.2million to $2.7million in 2019.
Market Maturing?
Moreover, Nick Chubb commented that the decrease in the investments coupled with the increased average size of each round shows that the market is at the early stages of maturing.
In addition, the report also revealed that there was a 60% rise in the number of venture funds dedicated to maritime, logistics, and trade operating around the world, in the past 18 months. Also, trade facilitation startups attract investors, whereas ship operations, ship management, and port management startups receiving a much smaller proportion of total funding.
2020 Developments
Concluding, 2020 will see many technological developments, amongst which will be API integrations, artificial intelligence, and Greentech are the technology trends set to have the biggest impact on the industry in 2020.
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Source: Safety4Sea
