They've got money to spend on marine innovation, and they're not afraid to use it.
By Ryan Skinner (email)
59° 56' N kicks off a new feature: The Marine Tech & Innovation Chat. Basically, I go one-on-one with a leading figure in the marine tech and innovation community to talk about what's going on, what's hot, what's not and so on.
Here you get the words straight out of the investors' and the technologists' mouths, via direct publishing of the Skype'd chat. If you're into marine and technology, it's worth it to follow these chats. If you've got a lot of ideas and opinions on the subject, let me know; maybe you'll be the next interview object.
This first chat, with BW Future's Joachim Bakke, is a premier. Next time, I will announce the interviewee ahead of time via my twitter and LinkedIn feeds, and anyone can submit questions that I will pose to the interviewee (as long as they're on topic).
With that, here's the first marine tech & innovation chat. Enjoy!
Ryan Skinner: Voila! Marine and tech innovation chat with Joachim Bakke of BW Future
Ryan Skinner: We could maybe get started if you could give me an elevator pitch for BW Future. What's it all about?
Joachim Bakke: BW Future was set up in 2007 to increase innovation in BW Gas. It is now a part of the Strategy and Projects team. What we do is to look for companies or ideas where we can contribute with competence and financing. The traditional approach has been to test out other's ideas on our vessels and maybe get a deal on one or more installations later. We are now actively seeking opportunities to help the companies grow together with us, through being a reference customer and a partner
Ryan Skinner: How much money is in the BW Future "pot"?
Joachim Bakke: The BW Green Marine Fund has been allocated 250 mUSD
Ryan Skinner: That's a pretty big number. Made any investments yet?
Joachim Bakke: We started looking for investments a little less than a year ago. So far we have taken a stake in Advanced Marine Coatings (carbon nano tube reinforced epoxy coating) and Amroy (the technology company behind AMC)
Ryan Skinner: What kinds of companies/projects are you looking for?
Joachim Bakke: We are in serious discussions with a number of players in the maritime field, most of them have green technologies that may help reduce emissions and/or meet upcoming requirements
Ryan Skinner: How many different technologies/solutions have you considered (ballpark)?
Joachim Bakke: We are currently working on a list of maybe 20 technology related projects.
Ryan Skinner: What is your opinion of the state of innovation in terms of environmental/green technologies in shipping today?
Joachim Bakke: When we first started looking at innovation in a general terms, we were intrigued with the amount of green technology innovation. There is a vast number of ideas that may or may not impact of the industry
Ryan Skinner: What kinds of green technology ideas do you like?
Joachim Bakke: If you separate the innovations into incremental and quantum leap, the latter is often the most sexy. But a lot can also be achieved by small steps, or working smarter
Ryan Skinner: When you refer to quantum leap innovations, what would that be, for example?
Joachim Bakke: I can of course not go into details on specific solutions we are looking at, but there are technologies that may change the way energy is managed worldwide, not only in the maritime industry.
Ryan Skinner: OK. But would you say your focus is more on the "hard" side (components, materials, etc.) or the "soft" side (software, business model innovations, etc.)?
Joachim Bakke: So far, we have focused on the hard side. That is where BW has most of its competence at the moment
Ryan Skinner: OK. Are there any blind avenues, you think? That is, areas where you explicitly do not think major progress will be achieved?
Joachim Bakke: It is difficult to be bombastic. We may have our opinions ,but then suddenly there is another genius solution to be found
Ryan Skinner: It seems to me that you are looking pretty widely and then applying general innovations/technologies to new applications in the marine sector? Is that accurate?
Ryan Skinner: Or are you pretty marine-specific (that is, the innovators are already thinking shipping)?
Joachim Bakke: We are looking for any technologies that may have uses in the maritime industries where we already have a presence (Shipping and Offshore).
Joachim Bakke: That is where we can contribute as an industrial investor, not only as a financial one. That is also where we can draw on our vast in-house expertise
Ryan Skinner: Do you feel like the difficult regulatory picture makes it hard for technology innovators to succeed in the maritime sector?
Joachim Bakke: It is difficult without some sort of background or understanding of the maritime world. But a lot of the players we are talking to have some of this understanding, and we can help fill in the gaps
Ryan Skinner: I know that many tech companies struggle because the regulatory framework around their technology gets changed. This particularly true in the maritime field. True?
Joachim Bakke: If the technology is not flexible enough and just meets some of the requirements that may be true. We see more and more that the technologies need to be integrated and not only installed to solve single regulations. That is also an area where our growing network may pull it's weight, by combining the technologies in our portfolio
Joachim Bakke: There are also opportunities related to the regulatory picture. New regulations often triggers innovation. However, changes in the maritime regulatory framework do not happen overnight...
Ryan Skinner: I see. Can you give me some more details around how you invest in technology? What's the time horizon? What share of the company do you like to take? What kind of returns are you aiming for?
Joachim Bakke: We are a medium to long term investor. It will depend on the specific case, but our horizon is 3-7 years
Joachim Bakke: We are not locked into any stake limits, but we prefer to let the founders and key personnel have an incentive to grow with us, either by owning shares or in other ways
Joachim Bakke: We are aiming for a reasonable return on our investments. We are not looking for quick exits, but if we believe the company is better off with more different owners we will facilitate this
Ryan Skinner: Do you need to find investment projects? Or do they usually find you? Where do you see the most opportunity (Scandinavia? Elsewhere in Europe? US?)
Joachim Bakke: We have received a lot of attention from our network and from some press articles. We are also actively looking, and believe that a combination of the two is good
Joachim Bakke: We see that a lot of the green innovation is happening in Scandinavia, but we are not bound by that. If we see something interesting elsewhere, we will pursue this
Joachim Bakke: The companies we are talking to at the moment are from Asia, US, Europe, and Scandinavia
Ryan Skinner: When it comes to investing in technology, what would you describe as specific to the marine sector?
Joachim Bakke: I think this is changing at the moment. Shipping companies have been customers but not investors. When you look at the owners of Ballast Water Treatment Systems today, there are some ship owners.
Joachim Bakke: It makes sense to be on the other side if you have to purchase expensive systems for your vessels, and others also need to be committed to being long term customers.
Ryan Skinner: Does BW see this kind of investment as a form of tech risk reduction?
Joachim Bakke: Not primarily. We see it as a way to use our resources for other things than just operating ships, and therefore as a way of diversifying
Ryan Skinner: OK. Just a couple more questions: Would you characterize the marine tech field as sufficiently capitalized, underfed, overfed?
Joachim Bakke: A bit of all. There are some large companies that are dominating, and there are small companies that lack the resources to get their technology to market. It is a very difficult market to penetrate before you have a track record
Ryan Skinner: Are there any particular forces that you would say stifle/slow innovation?
Joachim Bakke: This is a conservative business. Many owners will not change from a standard specification before they are required by regulations
Joachim Bakke: And on the other side, there are major improvements to be made for the owners that wish to reduce their environmental footprint and fuel consumption
Ryan Skinner: So it seems we're talking about a half empty/half full view of things. Depends on your perspective.
Joachim Bakke: I would say so. It is difficult to talk of ship owners as one group, there are certainly some conservative and some innovative ones
Ryan Skinner: Right. One last question: What would you describe as the most difficult thing about what you're trying to do?
Joachim Bakke: When looking at so many different technologies for so many different applications, it is a challenge to make informed decisions. But being in a marine environment with so many skilled and knowledgeable people around us certainly makes the job easier.
Joachim Bakke: Also, we are putting our brand name behind the companies we are co-operating with. So we need to make sure that we are comfortable with that. Maybe that is why we have not invested more up to now?
Ryan Skinner: Right. I can see that there's some reputational risk involved.
Ryan Skinner: Then I will just thank you for the opportunity to chat.
Joachim Bakke: Thank you