What could be Veson Nautical and ZeroNorth’s next acquisitions?

In the first half of 2022, we have some interesting capital raises and acquisition activity in the Maritime Technology space. Eric Priante Martin at TradeWinds covered those trends in two articles [1] [2] earlier this year. ?

Today, I would to shine some light on two interesting companies that may be driving some consolidation in the maritime tech space over the coming years. This are Veson Nautical and ZeroNorth. This year both companies got fresh capital on board to finance their further growth.??

Veson Nautical?

Veson got with a ‘significant equity investment’ from Francisco Partners an investor onboard along with @Pamlico Partners. The investment did not come as a surprise as for the past years there have been rumors that they are looking for a new investor.?

Shortly after the investment announcement, they announced the acquisition of Q88, another leader in the maritime tech space. Inorganic growth through acquisitions is a relatively new to Veson. Q88 is the company’s second acquisition after Oceanbolt in fall 2022.??

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ZeroNorth?

ZeroNorth welcomed PSG Equity as an investor as leader of its 50 MUSD Series B round. PSG Equity is a leading growth equity investor in the technology space. PSG has a track-record in making add-on acquisitions for its portfolio companies. Over its two-year history, ZeroNorth already has made some acquisitions, which included Propulsion Dynamics and ClearLynx.??

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Are Veson and ZeroNorth competing???

The short answer is that they are currently not directly competing. Publicly the present themselves as “Platform partners” under the umbrella of “Veson Partner Network”.??

Veson’s core is and has been its voyage management system, which is essentially documenting the core processes around planning and executing voyages. ZeroNorth has been more focusing on providing vessel operators with actionable advice on how to plan and improve the voyage execution. In essence they have made a big contribution to moving the ‘vessel performance monitoring’ solutions out of the ship owner’s technical department and into the commercial management space.??

As ZeroNorth is moving more into the commercial management space they also may become a direct competitor to Veson in the voyage management / optimization space. In my view, the product portfolio of both companies will continue to expand over the coming years. Some of this expansion will be done based on the capabilities that the companies already have in-house, but some of it will be inorganic through acquisitions.??

In their press communication, both companies also indicated that they intend to make more acquisitions. The big question is what acquisition will they make??

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Shortlist of acquisition candidates for Veson Nautical:?

With its large customer base an ‘open innovation’ acquisition strategy makes sense. With its extensive network, the company is capable of brining good new solutions to its existing customer base; this makes the existing customer base of the acquisition candidates less relevant.??

What could acquisition candidates for:?

• An acquisition in the realm of ‘vessel performance monitoring’ or ‘voyage optimization’ makes sense. This will enable them to provide more actionable advice to vessel operators on how improve the voyages. It will provide them with more accurate bunker consumption curves. Acquisition candidates in the space could include: We4Sea, Optimum Voyage, Sofar Ocean’s Wayfinder or Bearing.ai. None of those companies has a significant existing customer base which will make the integration into the Veson solution portfolio easier (fewer liabilities towards existing customers).??
• BunkerMetric: This is a Copenhagen-based startup which offers two solutions that are based on advanced analytics. The first is BunkerPlanner, which advises operators where to bunker, how much and what fuel grade. The second solution is BargeTracker which provides insights into all bunkering activities of vessels.?
• The acquisition of a digital bunker procurement marketplace solution could make sense. It will enable Veson to capture additional revenue from the bunker acquisitions of its customers. This would be a direct alternative to ZeroNorth’s ClearLynx. Acquisition candidates in this space may include DeltaConnect and Nereus Digital Bunkers.??

Combining the capabilities of the solution above with the capabilities Veson already has in-house it will provide the opportunity to expand its solution offering in the voyage optimization space, but also open the door to new (or more advanced) solution offerings in the pre-fixture realm. One of the things I am thinking about in the latter is a voyage calculator that puts a value of vessels that may be competing for a cargo and thereby enables the chartering desk to optimize their freight quotes.??

Another domain where you may see acquisition activity from Veson is on the market intelligence end, but I have left that out of scope of this list as it is less relevant in the competition between the two companies.??

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Shortlist of acquisition candidates for ZeroNorth:?

An obvious move for ZeroNorth is to move into the voyage management space. This will allow them to cover a bigger share of their customer’s solution space and thereby advance their decision support offering. An acquisition in the voyage management space would make most sense for ZeroNorth.??

In contrast with Veson is the cash flow generating capability of the acquisition candidate more important to ZeroNorth. They do not have the benefit of the large and global customer base that Veson can use for scaling a solution’s user base.??

Without Veson’s acquisition of Q88, Q88VMS would have been the most interesting candidate but with them off the market the following voyage management solutions could be interesting:?

• Dataloy: This is probably the most modern solution with a decently customer base especially in the Nordics. The API architecture of the solution makes it possible to integrate the VMS functionalities into the company’s existing dashboard/tools.??
• ?A smaller voyage management provider with a modern solution like Singulor or nextVoyage. Neither of those solutions has a significant customer base.??
• A legacy voyage management solution like Softmar/VesselOps or Shipnet makes little sense.??

If ZeroNorth’s strategic investors Maersk Tankers and Cargill Ocean Transporation are supporting the strategy of expanding into the voyage management space by adopting the newly acquired solution any of the target solutions would have a critical size customer base and thereby de-risk an acquisitions investment. Moreover, this will also signal to the market that this could be a serious alternative to Veson’s IMOS/VIP offering.??

Also, not all Veson’s customers are satisfied with the solution and service they get so there may be companies that may be interesting in switching despite the high costs of such an effort.?

If you are interested in developments in the Maritime Technology space, I would like to invite you to download Skysail Advisors’ Maritime Technology Landscape via: May 2022 Skysail Maritime Technology Landscape (skysailadvisors.com).??