2019 was the most high profile year yet for the maritime startup scene. There has never been more interest in the technology and entrepreneurs trying to transform the sector. But how much was invested in the sector during the year? What types of rounds are closing? And what application saw the most funding?
On the surface, 2019 was a record breaking year for venture funding in the shipping industry with $1.14bn raised by startups and scaleups building technology aimed at the maritime sector.
The Flexport effect
The headline figure is distorted, however, by the massive $1bn investment in Flexport led by Softbank. Investment activity in the industry actually declined slightly from 2018, with fewer deals completed at a higher average value.
If Flexport’s contribution is removed from the figures, venture funding in the industry declined by 24%, from $190m in 2018 to $144m in 2019.
Funding rounds by number:
The number of deals completed in the year is down 8% from 2018, but the median size of each investment has increased by 18%, from £2.2m in 2018 to £2.7m 2019.
- 55% of funding rounds were seed investments, representing a total value of $11.2m.
- 36% of funding rounds were venture or corporate venture, representing a total value of $1.18bn.
- 9% of funding rounds were grant money, representing a total value of $1.6m.
Follow the money
When examining application areas, Flexport once again creates a distorted market picture, accounting for 87% of the total venture funding in maritime this year.
Of the £144m dollars raised excluding Flexport, 39% went to companies focused on trade facilitation, this includes problem areas such as freight forwarding, customs broking, and trade document management.
Ship operations, which includes applications for use onboard ships to improve safety, efficiency, or welfare accounted for 22% of funding raised. Ship management, which includes crewing, training, bunkering, and fleet optimisation tools secured 21% of the total.
Lastly, Port operations, which includes port optimisation tools, cargo handling systems, community systems, and collaborative management platforms, saw the remaining 18%.
Want to learn more about the maritime venture landscape?
From navigation to chartering, bunkers to freight forwarding, digitalisation has touched every facet of the shipping industry in the last decade. As the industry’s transformation from analogue to digital steps into higher gear, it is increasingly catching the attention of entrepreneurs and investors looking for big problems to solve.
In Shiptech 2020: The state of venture investment activity in the maritime industry, we explore 2019’s maritime startup activity, including:
- An overview of venture funding
- The notable investments made in the year
- New entrants to the market
- The technology trends to watch in 2020
You can download a free copy of the 27 page report below.