Danish tech firm Danelec buys cash-strapped AI innovator Nautilus Labs
Around 20 Nautilus Labs staff will move to Danelec as part of the deal to keep the platform running, however over 70 staff were made redundant in recent weeks as capital raising efforts foundered
After burning through $48m of Microsoft funding, the innovative AI platform developed by New York tech firm Nautilus Labs has been bought out by Danish technology provider Danelec
NAUTILUS LABS, once regarded as a front-runner in shipping’s rapidly consolidating digital start-up sector, has been bought out by the Danish technology provider Danelec amid staff lay-offs and cashflow concerns.
Copenhagen-based maritime safety and sustainability specialists Danelec acquired Nautilus’ artificial intelligence technology platform for an undisclosed sum this week and will take on some of the key Nautilus staff as part of the deal.
The purchase follows significant layoffs at Nautilus Labs over recent weeks, amid speculation from Nautilus’ customers and partners that the firm had failed to raise sufficient capital to continue and was running out of cash.
Nautilus was founded in 2016 to develop maritime efficiency technology with hefty injections of start-up funding from industry partners and Microsoft’s venture arm M12. Initial success drove the development of an AI platform that promised to leverage machine learning-based predictions to reduce fuel waste and emissions, while maximizing commercial returns by analysing IoT data, weather patterns, arrival and departure times, and commercial needs.
In March last year Nautilus announced another $34m in Series B funding, again led by Microsoft via M12, this time in collaboration with its Climate Innovation Fund.
That latest round took Nautilus’ total raised capital to over $48m and the company pledged to use the investment to develop new products, hire more staff and expand its global network of offices In New York, London, Paris and Singapore.
As recently as last month that strategy appeared to be holding as management unveiled the latest partnership with maritime voyage management systems specialists Dataloy, amid plans to design a unified maritime decision-making platform.
However, behind the scenes Nautilus Labs partners had started voicing concerns and on November 10 an estimated 70 staff were made redundant, with several staff noting on social media sites that the company had wound down operations.
Naultilus Labs chief executive Matt Heider declined to discuss the redundancies directly but said: “it’s no secret that Nautilus is, and has been run, like any [Venture Capital]-backed startup in the growth phase. Our focus has been on building a strong platform, gaining demonstrable product-market-fit in the maritime industry, and investing in growing the technology's impact”.
“It takes a lot of capital to build what we have, and in the hands of Danelec, Nautilus Platform is better positioned than ever to create value for its users while maturing commercially,” Heider continued, adding that the primary driver for Danelec’s acquisition was the strategic fit between the two companies rather than cashflow issues.
The deal with Danelec will see the Nautilus Labs platform continue in its current form and support its customers on existing terms. Neither Nautilus or Danelec would confirm how many Nautilus staff were staying on, however Lloyd’s List understands around 20 of the international team, including Heider, will be joining Danelec.
The buyout follows a busy period of mergers and acquisitions in the maritime technology sector.
Consultants Thetius estimate that maritime tech M&A transactions grew by 57% between 2021/22 and 2022/23, while the value of those transactions grew by 77%, from $9.6bn to $17bn over the same period.
But as companies seek to expand beyond niche start-up services to a wider range of data-led optimisation services, many are struggling to scale profitably.
While Nautilus has focussed heavily on using the funding rounds to develop the platform, which has garnered support from both customers and partners, like many start-ups transitioning to scaled operations they have struggled to match spending with profit.
Danelec have a long history with Nautilus as one of their most important data collection partners and believe that they can make the integration of the platform work as a strategic fit.
With the acquisition, Danelec is expanding its capabilities into the realm of vessel optimisation and the addition of high-quality, high-frequency data from the Nautilus platform offers obvious synergies.
“We feel confident that we are well-positioned to commercialise Nautilus Lab’s technology platform,” said Danelec chief executive Casper Jensen, announcing the deal on Friday.
Whether Nautilus Labs continues as a brand remains to be seen. For the moment both operations will continue business as usual for as long as possible, according to Danelec management. The integrations will not, however, see Danelec changing its agnostic approach to data collection.
“Our business model is — and will continue to be — technology agnostic,” said Jensen. “Our position in the maritime market is built on our open platform approach…. We don’t need to lock our customers in — we believe that we can bring the most useful solutions to the market if we have our customers and their needs at the centre of our offerings. To do so, we deliver solutions that can tap into our customers’ existing setups to fit their needs. With our latest acquisition, we can now deliver end-to-end,” said Jensen.