Tech Accelerator Sets Sail in The Maritime Sector
by Gil Ofer, Head of Open Innovation, Eastern Pacific Shipping
The merchant maritime industry is one of the oldest in the world. Today about 90% of all global trade is still carried out by sea, making it a hundred-billion-dollar industry. To stay competitive, ship owners and managers have always embraced technology to improve the way business is conducted: Wood ships have turned to steel. Sails have evolved into engines. The navigational chart and stars have been replaced with radar and GPS.
These advancements have always come slowly and in incremental stages, lagging behind the latest technological trends that other mature industries readily adopt. A driver behind this is because the shipping industry is known to be cyclical; where boon times help companies ride out the bad times. It’s no wonder corporate inertia sets in for those who enjoy success and can survive turbulent markets. The adage, ‘If it isn’t broken, don’t fix it’ can easily become the mantra of any profitable shipping company.
Today, however, we are seeing a shift with ship owners and managers. The apathetic desire to adopt new technologies is being replaced with the realisation that this industry is ripe for disruption. The only thing stopping a start-up from shaking up the industry is a proper link between technopreneurs and enterprise. One such company committed to building this link is Singapore based ship manager Eastern Pacific Shipping (EPS). They have established a venture arm partnership, named the Eastern Pacific Accelerator powered by Techstars, to nurture innovative solutions tailored to the maritime and logistics industry.
Over the last 30 years EPS, a privately-owned company, has established itself as a leading ship manager that’s able to navigate the complex demands of a worldwide marketplace. A workforce of 5000 sea and shore staff oversee a diverse fleet of 13-million deadweight-tonnes comprising of container, chemical, dry bulk, gas, car carriers, and oil tanker vessels. The teams that manage this fleet span across several departments such as marine technical, operations, crewing, and commercial – all of which are ripe for technological advancement. Being headquartered in Singapore gives EPS an added advantage in the industry’s march towards digitilsation. The city-state is a living laboratory for companies to invest in research and technology to catalyse emerging breakthroughs and drive new areas of global economic growth. This makes EPS’ accelerator program the ideal ecosystem for start-ups looking for funding, mentorship, and a clear path towards commercialisation. However, building an in-house accelerator provided a set of challenges because at its core EPS is a shipping company. To successfully leapfrog into corporate venture capital, EPS partnered with Techstars, the world’s leading start-up accelerator that helps entrepreneurs succeed. Partnering with Techstars gives the accelerator the infrastructure and track record needed to seek, invest in, and scale technologies that will make a significant impact in the maritime world.
The application portal for the accelerator opened on April 8th of this year and will run until August 4th. There has already been a slew of applicants from around the world. These companies are all at various stages of growth in their entrepreneurial journeys, from early-stage start-ups to ones that have raised several millions of dollars. Only ten companies that apply will be selected for the inaugural class, which commences in November 2019 in EPS’ headquarters. What follows is an intensive three-month programme of research and development, mentorship, and collaboration. The accelerator will culminate in February 2020 with a demo day where every start-up will pitch its newly polished business to an audience of venture capitalists, corporate innovations leaders, and industry experts to facilitate investments and energise the entrepreneurial community.
The accelerator is in search of all start-ups that focus on the maritime sector, but there are specific needs the industry currently has that require immediate attention. Start-ups that focus in these areas are bound to receive added consideration from investors and companies.
Over the last few years, there has been a significant uptick in investments in logistics companies, an industry is known for having low margins and long working capital cycles that make it difficult to grow and scale. Today, there is a growing trend of logistics companies presenting innovative business models, improving upon previous approaches that have stunted any real advancement.
A recent trend in the maritime space is that tech companies are focusing on shore-based solutions. Ranging from an interface that manages a shipping company’s complex global agency networks to developing a technology that improves relationships with a charterer, tech start-ups that address the maritime space have a great opportunity for creating new solutions that make a big difference, especially as they relate to automation, software, and predictive modelling. This includes adjacent sectors to the maritime sector, such as energy, IoT, and financial services.
Finding a Need is an Art
Before embarking on an entrepreneurial journey, all founders need to ask themselves the following question: is my product solving a real problem or providing a solution for a problem that doesn’t exist? This may sound satirical, but the reality is if you cannot answer this question, you may need to rethink your entire model. Collating the information needed to identify enterprise customer needs is an art form. Critical feedback lies with key individuals, different departments, and even a variety of organisations. Piecing this together can take years and remain incomplete and ineffective. To ensure your start-up will make an impact by addressing consumer needs, you must collaborate with an industry player through any channel available.
Accelerators dedicated to the maritime industries are still in their infancy, with much to explore and learn in the coming years. However, one thing is clear today, the path of least resistance to success for a maritime technopreneur is through an industry-backed accelerator programme.