Home Technical AMPLIFIER’s investment into Nautilus Labs

AMPLIFIER’s investment into Nautilus Labs

When we know more about outer space than our oceans, it’s a problem. Especially since over 90% of the world’s trade is transported by sea. Read on to catch a glimpse into Amplifier Ventures’ strategy and why we chose to invest in the SaaS platform Nautilus Labs.

Today, it would appear that when it comes to exploration and innovation, more public attention is given to SpaceX and NASA’s Mars programmes than our own oceans. There are some obvious reasons for this. Firstly, who doesn’t like a great big rocket? Secondly, it motivates us. Humanity relishes these challenges and is inspired by them, as JFK once said, we do these things “not because they are easy, but because they are hard, because that goal will serve to organise and measure the best of our energies and skills.”

Outer Space vs Our Oceans

When we look at facts, however, it is hard not to wonder whether human ingenuity would be better focused a little closer to home, where in some respects the challenges and need for innovation are just as great. The facts:

  • The oceans cover more than 70% of our planet
  • 80% of oceans remain unexplored and unmapped
  • Over 90% of the world’s trade is transported by sea
  • It generates more than 50% of the oxygen we breathe
  • It stores 50x more carbon dioxide than our atmosphere
  • Maritime contributes USD 282 billion to the US economy alone

We could go on, but you get the picture: the ocean and it’s economy is massive and just a little important.

When it comes to the maritime industry in particular, it has shown itself to be slow to innovate and undergo the kind of transformation other major industries have in recent years. With few, if any, high growth tech startups to emerge from the industry. In one area, however, more than any other, it has been forced to innovate and change.

Fuel and Emissions in the Maritime Industry

Couple of quick things you need to know on the subject:

  • Ships have operated using HFO (Heavy Fuel Oil) almost exclusively for the last three or four decades. Cheap stuff but dirty when it comes to sulphur emissions especially.
  • Despite this, more than 68% of the OPEX of a ship is made up of fuel cost. In addition, post-2008 markets have been sluggish for shipping and the margin of profitability limited, meaning that optimising on the OPEX has never been more important.
  • Couple this with the fact that the long-planned and recently implemented IMO 2020 regulation (mandating a maximum sulphur content of 0.5% in marine fuels globally) has resulted in additional costs such as fixing scrubbers, or operating with alternative fuels (diesel, LNG etc.).

The combination of all of these factors has created a perfect storm and a major problem to solve. Or is as we like to say, one hell of a pain point.

Why we invested in…Nautilus Labs

This was the environment as we found it when the opportunity to invest in Nautilus Labs arose. Nautilus Labs is a SaaS platform that uses artificial intelligence to arm ship owners and operators with real-time predictive decision support to optimise voyages and lower emissions. In effect, to reduce fuel consumption.

The Nautilus platform achieves this by embedding data gathering tools (IoT) into different components of the ship to best understand each individual vessel and its operating strengths. This information is then synthesised with weather forecasts and ocean conditions to make a speed recommendation that will optimise the ship’s performance.

At the point of our investment, the team had shown the ability to engineer the AI models needed to address the problem, as well as execute on the product and go-to-market strategy. With multiple customers, ranging in segment fleet size, they were also already able to achieve a 2% reduction in fuel consumption on average per voyage, a massive amount when considering the $150–200 billion spent on shipping fuel every year. This gave Nautilus a rare opportunity in maritime tech, to both drive rapid adoption of their SaaS product, whilst simultaneously being able to build the revenue streams capable of creating a truly massive company.

In addition, the team brought a powerful outsider’s perspective, coming in without biases and with the right skills set (backgrounds at Google, Palantir and IBM) to analyse and challenge the existing premise on how things should be done.

Since our investment, Nautilus has more than justified our belief in them, the product and the strategy. Growing rapidly, with offices now in New York, Singapore and Paris, and more than 200 vessels committed to the platform.

“We’ve seen in our industry that transparency and accountability are the foundation to operational excellence. Placing a higher value on transparency is ultimately what will drive greater profitability and sustainability across the entire ocean shipping ecosystem. Shipping leaders need to work together to address the dysfunction that exists between stakeholders that inhibits transparency and produces broader inefficiency. The firms that embrace this change first will ultimately achieve competitive advantage in the market, and drive ocean shipping toward the carbon-free future the world so sorely needs. — Matt Heider, CEO Nautilus Labs

The environmental case in point

A final point worth making is that of greenhouse gas emissions. Today, shipping is responsible for about the same amount of greenhouse gas emissions as South Korea. By 2050, if the industry continues to burn fossil fuels, shipping would produce as much as 17% of global emissions — more than the whole of the United States.

Only two weeks ago the EU parliament voted through a 40% greenhouse gas reduction target for shipping companies to be reached by 2030, bypassing existing global regulation and negotiations with the IMO. As regulation and its implementation accelerates, Nautilus provides the tools and profit-driven case urgently needed for shipping companies to respond.

This additional pressure, to an already overwhelming situation in the industry, leaves us confident that the team can continue to grow at speed, with massive benefit to the industry itself and still bags of transformative potential to unlock.

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