The gap in the market
In 2018, the global volume of maritime trade reached a record 11 billion tons. The world’s total cargo ton-miles were estimated to have reached a record high of 58,812 billion. Yet, across the maritime industry, professionals were spending 40 percent of their day on low-value and low-complexity tasks – largely because the exchange of essential data and documents was hampered by an over-reliance on email, spreadsheets and PDFs.
This was the situation that the founders of Voyager, a cloud-based platform for the non-containerised marine transport industry, wanted to address.
Matthew Costello, CEO, explains: “Moving commodities around the world can involve anywhere between 10 and 20 different companies from vessel owners, cargo inspectors, brokers, and port authorities. It’s a major project, with a lot of stakeholders, a lot of counterparties – and some pretty high stakes, when both the cargo and the vessel are worth millions of dollars. Managing that kind of project with emails and spreadsheets is inefficient, time-consuming, and error-prone.”
Costello and his co-founder, Bret Smart, also realised that the maritime industry had access to extraordinarily valuable data, but was hoarding it in spreadsheets and emails that made it simply inaccessible to operators and decision-makers.
Having looked at the adoption of technology within industries that depend on cross-company collaboration and project-management style teamwork, Costello and Smart decided to bring the same level of workflow automation, data sharing and transparency to the transport of bulk commodities. The Voyager platform was born with two simple goals: to eliminate repetitive tasks and duplicate effort, while giving operators new insights into their daily business.
Platforms and project management
Voyager addresses two issues. First, it breaks down the voyage into specific workflows, for example, checking the cargo is on spec, submitting a claim or paying an invoice, and gives users the tools to configure these workflows in a digital representation of their day-to-day workload. But because the format is centralised, all the information is accessible to all stakeholders, with different levels of permissions.
Second, it enables that newly structured data in the system to be analysed in real time to create more predictive insights into operational successes and potential weak spots. Operators and owners now have warnings about potential inventory stock-outs at different load and discharge points, they can predict delays, and pre-empt customs and documentation issues.
Costello explains: “We call it a Cargo Control Centre. Essentially, we give our customers a detailed, granular, high-level overview not just of where the cargo is and how much it costs to move it, but all the operational details as well. So, they can see how all the different counterparties are working together to move cargo from A to B. It’s a powerful way of reducing operational risk across the board.”
The use-case and the sales cycles
Having founded the company in 2018, the Voyager team secured investment in an early round of angel fundraising. They developed exceptionally strong use-cases based on workshops and pilots with selected customers, and knew they had a strong business case to offer potential clients. For example:
• One customer in the chemicals sector identified $4 million in savings over three years from moving its operations to the Voyager platform.
• A large oil and gas company in the UK identified $3 million savings over three years by replacing its current systems with Voyager.
• A European oil and gas company identified up to $20 million in savings by moving its offshore rig logistics to Voyager.
“Voyager really sits at the intersection of workflows and analytics, and these savings tended to come from the analytics side – using machine learning and data visualisations to make better predictions,” Costello points out.
“However, we also ran other studies on workflow, specifically reducing all internal and external email by about 90 percent. That produced net productivity gains of 20-25 percent across the whole department – simply by replacing email with Voyager.”
When Costello and his team looked at other examples of workflow automation, they found that, for example:
• One European company could stem the outflow of $250,000 per year caused by re-billables getting lost in the chaos of emails and documentation.
• A Houston chemical company could save up to $500,000 per year around inventory management, reduced stock-out risk, and better predictability of vessel arrivals, and reduce its safety stocks by $4 million.
The Voyager team had the numbers on their side. Instead, the biggest challenge they faced was the typically lengthy sales cycle that prevailed in the industry. “One good meeting with the right person pitched at the right level by the right people can literally take three or four months off the cycle. That can be the difference between a six-month and a ten-month process. That works for established companies with extensive networks, but it can be an almost existential threat for an emerging technology like ours. It’s all about access,” says Costello.
Drive, determination and open doors
By August 2018, Voyager was a member of the TechStars accelerator programme in Oslo. This was when the team met representatives from Phaze Ventures, who were acting as mentors on the programme. The meeting was an almost instant success. Although not fundraising at the time, the Voyager team recognised that a partnership with Phaze would offer them substantial opportunities, not least in terms of geography. With strong connections throughout the Middle East, the Phaze Ventures team had essential contacts and experience of a significant opportunity market.
They also had something in common with the Voyager founders: a will to succeed. “We really liked the fact that Phaze were a young and ambitious team, with a fresh perspective on early-stage investing. They had the same kind of enthusiasm, drive and grit that you expect in a team of start-up founders, but they were VCs – and you don’t often see that. They ‘get’ the start-up mindset as much as the companies in their portfolio. We really liked what they were trying to do – and we were very hopeful about some of the partnerships they were trying to develop which we thought would be very beneficial to us.”
Initially, the relationship between Phaze and Voyager was focused on providing support through access to larger corporates in Oman and beyond that would typically not be available to a company of Voyager’s size and or geography. The relationship was so successful that when Voyager started its seed round in February 2019, Phaze Ventures was one of the first groups it reached out to.
The soft commitment from Phaze came pretty quickly, and Voyager completed its seed round with four investors: Phaze plus three VCs in the US.
Anchored to success
Although still in the early stages of its development, Voyager has achieved remarkable success, with several pilots being run in the US and the Middle East, and with more than $70 million of cargo being managed through its system by January 2020.
The company continues to look at ways of improving its platform, most recently by streamlining the process of onboarding its first major customers. “We noticed that at an enterprise level, onboarding can be a torturous process that alone can occupy a whole project management team,” says Costello. “We’ve developed a zero-touch way to get our customers and their partners on board safely and securely – one workflow at a time. It’s pretty flexible and it doesn’t require endless face-to-face meetings.”
This is set to be a critical factor for Voyager whose business model has substantial network effects built in, as well as the companies who can ramp up quickly when demand picks up again. “Once we get two or three anchor clients signed up, their entire network of partners, contractors and sub-contractors comes with them – that’s a powerful way of spreading the word,” says Costello.
Securing those anchor clients is exactly how Phaze Ventures has been helping the Voyager team. “We’ve found that a successful sales pitch has two angles: high-level alignment at the corporate level and support from end-users. Phaze has really helped us in tying those two elements together – they get senior people on board which empowers the end users to move things forward.
“They’ve even taken business development meetings on our behalf,” continues Costello, “It really feels that, for Phaze, it’s all about building a channel into the CTOs at large multi-nationals to fast-track things like pilots, and proof of concept and sales. They’re really focused on helping us succeed – by getting us that access and shortening our sales cycles – and not just raising more funds. They’ll take a meeting and pitch us and proactively go out to sell our solution. I love that. I don’t know many other VCs that do that.”
Sea News Feature, May 6