[SINGAPORE] From decarbonising ships to making seafarers more efficient – Motion Ventures wants to bet on technologies that “will define the next generation” of maritime innovation, said its founder and general partner Shaun Hon.
To power its support of these technologies, the firm unveiled a fund in March that aims to raise US$100 million. It has attracted more than half that target so far. This follows the success of its inaugural S$30 million fund launched four years ago.
Hon said the maritime industry has been slow to adopt new technologies, but that innovation is gaining steam. The International Maritime Organization’s target for global shipping to hit net-zero emissions by or around 2050 has spurred investments into electric vessels, alternative fuel and digital tools that improve efficiency on board ships.
The ongoing tech funding winter, which began when venture capitalists slashed investments with the rise of interest rates from 2022, has not hit maritime startups as hard as it has with consumer startups.
Hon said: “If you think about maritime venture investments, they’ve only gone up, though it wasn’t like there were a lot of investors before.”
He added that startup valuations in this space are driven by rational business fundamentals.
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Motion Ventures has thus far backed four startups with its second fund. One of them is Fernride, from Germany, which provides autonomous and electric trucking solutions for the maritime industry.
The second is OceanScore, also based in Germany, which offers solutions for compliance with the European Union’s Emissions Trading System and fuel regulations.
The remaining two startups are maritime insurance platform Ceto, and Moddule, which is building a “command centre” solution for logistics.
Hon identified maritime decarbonisation as a big investment theme, fuelled by climate regulations. Solutions that help vessels cut down on fuel consumption carry the dual benefits of slashing both emissions and costs. This means “there’s no trade-off” for shipping companies to adopt such solutions, he noted.
Digitalisation of the shipping industry is another key focus. Hon noted that more vessels now have Internet access, thanks to satellite solutions such as Starlink. With vessels becoming like floating offices, shipowners and ship managers can “unlock a lot of business value” by shifting away from pen-and-paper processes.
Solid fundamentals
Hon, previously an investment principal at Singapore venture capital firm (VC) Trive, founded Motion Ventures in 2021.
That year, many VCs were still focused on hot segments such as fintech and consumer apps. But Hon, a mechanical engineer by training, grew interested in maritime tech after conversations with several industry players.
He learned that the sector had promising startups that were “under-funded, but had very solid business fundamentals”.
“These businesses were break-even by default, or “alive”, in startup terms. But no one was investing in these,” he said.
With its inaugural fund, Motion Ventures backed 27 maritime startups across the world – such as Singapore electric vessel builder Pyxis, Indian container reuse platform MatchLog, and Fishtail, a US startup providing financing for freight forwarders.
The geographic diversity is in line with how the shipping industry itself is “extremely global”, said Hon, adding that his team looks for the “best technology that can move the industry forward”.
He sees Europe being a hub for emissions-reduction solutions, while the US and India have produced freight and trucking innovations, due to their need to move goods around huge landmasses.
A tailwind for maritime startups is the healthy level of acquisition activity happening in the maritime space, which means investors can realise their investments beyond the public listing route.
For instance, DeepSea Technologies – a maritime AI startup that Motion Ventures backed through its first fund – was acquired by Japanese engineering company Nabtesco Group in 2023.
Government support is a further boost for the maritime tech ecosystem. Singapore has, for example, formed “green and digital shipping corridors” with international partners to promote the use of new technologies, Hon noted.
Bridging startups and corporate players
With its broad portfolio, Motion Ventures has attracted maritime corporations to invest in its funds for exposure to startups.
Its first fund has 17 maritime companies as investors. They include maritime classification society Lloyd’s Register, ship-management company Wilhelmsen, and the corporate venture arms of shipping companies MOL and IMC Industrial Group.
Hon said: “Once we had a few investors come on board, over time, the network effect just started playing out.” The majority of the investors in the first fund also stepped up to back the second one. Motion Ventures has not disclosed specifics.
The VC hopes to not just be a financial investor, but also a “bridge” between its portfolio companies and its base of corporate investors, said Hon.
He estimates that about two-thirds of its portfolio companies have developed working relationships with the VC’s investors.
For instance, France-based Everimpact, which Motion Ventures backed with its first fund, collaborated with Wilhelmson and MOL to test carbon dioxide sensors on board MOL vessels.
“This is a collaboration that would have been extremely difficult to do if we were all not at the same table,” said Hon.
Back in 2021, maritime tech was a blue-ocean opportunity, but the deal space is now getting more crowded. Hon sees more generalist VCs showing interest in investing in this sector.
“Non-maritime VCs could invest, literally, in any space in the world, but they’re starting to pay attention to maritime,” he said.
“I think those are very positive and encouraging proof points that what we’re doing is in the right direction.”
