AboutShips: Unprecedented levels of institutional capital making its way into maritime services

Maritime CEO caught up with Manish Singh for a follow-up discussion on the growing role of private equity in the maritime sector. Singh was previously founder CEO of Ocean Technologies Group (OTG), a maritime operational SaaS group, and prior to that a prolific consolidator within the shipmanagement and marine services space through a decade and half at V.Group.

As predicted by Singh in our feature article last summer, the maritime sector has seen a flurry of mergers, acquisitions, minority investments, and early-stage funding rounds. Singh believes we are seeing an unprecedented level of institutional investment into maritime services businesses. So much so, that this has prompted him to set up AboutShips, a boutique investment advisory and operating partnership structure for entrepreneurs and investors aimed at services businesses that are about the people and ships that make up the global maritime supply chain.

The transactions within the sector are too numerous to list here, but according to Singh, notable themes start with environmental impact. No surprise that the landscape focused on decarbonisation, fuel transition, green propulsion, CII, and wider maritime environmental impact is rapidly heating up. Singh says he is personally most keen on leaders who will emerge within this space in the next two to three years.

Soon after gaining start-up funds, ZeroNorth has been busy expanding organically and through acquisitions including Prosmar and GTS, Singh points out as an example.

“This is also an area that is deservingly seeing the most amount of early venture capital support”, says Singh. “With a flurry of challengers entering the associated market in ratings and intelligence, I expect incumbents such as Rightship will see a changing peer group in the next year or two.”

Singh also sees continuing consolidation within the shipmanagement space. The merger announcements involving OSM and Thome or the minority investment that Synergy Marine was able to raise, are “only among many to follow” predicts Singh, as the sector embraces a faster pace of consolidation. He expects the emergence of the “2,000 ships under management super groups” in the next couple of years, “through collaboration within the top tier”, paving the way for rapid steps towards the strategic asks of decarbonisation, digitalisation and weeding out “scourges” of the sectors, including seafarer abandonment, and sub-standard grassroots investments.

Another big theme Singh returns to repeatedly during his conversation with Maritime CEO is the coming of age in maritime intelligence.

“Not only do we have unprecedented levels of data within the blue economy, but we are also seeing greater collaboration and transparency,” says Singh, forecasting that this will re-draw the market map of maritime intelligence within the next two to three years.

Notable developments within the sector include Kpler, which has been busy growing its portfolio after raising $200m in growth capital last year and then acquiring businesses including MarineTraffic and FleetMon recently. Another notable move was the carve-out of maritime intelligence from Informa and its acquisition by Montagu private equity.

Others venturing beyond private equity into the public markets have had a rocky ride, including Windward AI.

Commenting on this trend, Singh advises: “Maritime services founders have to be careful against premature entry into public markets. Whilst maritime remains a truly global industry, it is not fully understood by the average analyst or retail investor, and high-quality maritime service businesses end up seeing unfair punishment by the markets who don’t always react sympathetically to the business’s true growth drivers.”

Commercial and freight enterprise solutions are another area that excites Singh. Much like the heavily fragmented operational SaaS landscape, where market leaders like Ocean Technologies Group will likely be catalysts for further consolidation, Singh says the industry is finally seeing aggregators emerge strongly in the commercial SaaS and freight management landscape. Having announced growth investment from Fransisco Partners, Veson Nautical has continued consolidation within its value chain by acquiring Q88. Elsewhere, Marcura raised growth capital around the same time from Marlin Equity partners.

“With greater complexity and regulations impacting the commercial operations landscape, we will see further institutional involvement or listings, such as Freightos,” Singh predicts.

Singh recognises that institutional capital – and specifically private equity – has divided opinions within shipping circles, but maintains that at a time of unprecedented need for capital to fuel innovation, transition, digitalisation, and growth, institutional backers should be embraced by entrepreneurs and users within the maritime world.

“The need for investment is not insignificant and end-users and institutional capital will hold us to account through the upcoming transition,” Singh says.

This is backed up by intelligence Maritime CEO has on the matter, which suggests an unprecedented number of transactions are underway within the maritime services sector, with well-known as well as new names keen to find the best maritime transformation platforms to back, with many stories set to be broken on the topic by Splash in the coming months.