Henry Palmer, venture capital investor and Principal at AMPLIFIER Lab in Berlin, is an expert in supply chain and making investments in the space—particularly maritime. He sat down for an episode of the Future of Supply Chain podcast with us to talk about investing in ocean shipping, the maritime segment of the supply chain, the size of the market, and challenges incoming early-stage supply chain companies might encounter when entering the maritime space.
AMPLIFIER Lab is an innovation unit and venture capital fund spun out of the shipping industry. Henry’s team sees the supply chain as an ecosystem that’s interconnected. They focus on smart enterprise SaaS technology, IoT supply chain visibility, autonomy, trade finance, and deep learning.
AMPLIFIER targets innovative companies with a worldwide presence, scalable business models, and strong differentiation. They’ve invested in companies like Katapult Ocean, Nautilus Labs, Humanising Autonomy, Shipstock, and Kiwi.
How AMPLIFIER got its start
Henry has a vast body of knowledge and deep investment expertise in the supply chain industry, specifically in the maritime space. He launched his first company, Elephant Gin, in his mid-20s.
“I decided the time and money it would take to get an MBA would be more interestingly invested into building a company--something I could hold in my hands and enjoy,” he says.
“That was my first experience of investing in and building a company, and it was a huge amount of fun.”
Henry soon began investing in early-stage companies and got to know venture capital in the process. Ultimately, he and longtime friend Christian Oldendorff, a third-generation ship owner, launched AMPLIFIER together.
“Christian was asking questions about how he should drive innovation back into the supply chain industry,” Henry says.
“We took all that domain knowledge and expertise from the maritime science and extended that network across key verticals in the supply chain, including the automotive and freight sectors.”
AMPLIFIER has a strong network of industry experts and early-stage seed series investments; the team began investing in maritime operations in November 2018.
Making investments in ocean shipping
In terms of supply chain investments and mobility, Henry says the AMPLIFIER team is most excited about:
- Trade finance
- IT visibility solutions
- Autonomous robotics
- Operating environment
- Deep learning
- Artificial intelligence for smart enterprise thinking (predictive rate, performance optimization)
Henry’s team assesses what point each company is at on the innovation curve, the key pain points, the best solution to alleviate them, and how ready the customer is to adopt new, innovative approaches.
When it comes to investing in maritime operations, AMPLIFIER’s focus is on optimizing vessel performance. They collect onboard and third-party data like weather routing, fuel usage, and shore data to assess the ships’ performance.
“We basically run that data through machine learning engines that can ultimately achieve 3 to 5% fuel savings,” he says.
To put that ROI in perspective, the typical 50-vessel shipping fleet of average- to medium-size ships spends $200-250 million on fuel. And, in terms of environmental impact, it’s a massive win.
Maritime market size and potential obstacles
Henry says potential investors should approach the maritime supply chain market with caution.
“The initial impression of total market size is not necessarily easily translatable in terms of the market size for the actual solutions that we're seeing in new startups that are emerging onto the scene,” he says. “So sometimes the numbers get inflated a little bit.”
Still, he says that 90% of all goods in the world will be transported via ship at some point in the supply chain--and the industry is large worldwide.
“In terms of the world fleet and total asset value, you’re looking at north of $1 trillion,” he says. “In terms of the value of goods, hundreds of billions of dollars.”
However, large segments of the market are consolidated. Henry says on the container side, the top end of the market is especially consolidated. For an early-stage company trying to break into that market, that means they must break into the segment they’re interested in being part of.
“Historically, it's been a conservative, slow-moving, slow-to-innovate industry,” he says. “You need to understand some of those distinctions in terms of the market and the barriers that can be present.”
Partnering with industry veterans who are also advocates of your approach to the market is also critically important.
“If you don't already come from the maritime supply chain industry and you're going to bring a fresh set of eyes, you need to find a champion very quickly--somebody who understands your vision,” he says.
To listen to the full Future of Supply Chain podcast episode #31 featuring Henry Palmer, click here.
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