A Digital Fabric for Maritime Trade
Gil Dibner

Today, we are delighted to announce our investment in Portchain, a Copenhagen-based company that is building a digital fabric for the global container shipping industry.

We first met Portchain over a year ago and spent the past 14 months getting to know the team, their vision, the company, and the industry in which they operate. Our conviction level here is so high that we felt comfortable putting $5M to work here, one of our largest investments ever, and our second investment in Denmark. Despite the size of our check (and the fact that the company has already raised several million dollars from a set of very impressive and relevant angel investors), Angular is proud to be the first institutional venture investor in the company.

Portchain sells vertical enterprise software to the global maritime container industry, a massive $500B industry that underpins nearly all of global trade. Nearly everything you have purchased has at one point or another moved internationally in a container on a ship. The global container trade is measured in TEUs (twenty-foot equivalent units) each representing the movement of a standard 20-foot container (L20’ x W8’ x H8’. the kind you might see on a mid-size truck). A 40-foot container, the kind you see on a longer trailer truck, is 2 TEUs. The largest modern container ships are 24,000 TEU vessels. Global container trade is roughly 180 million TEUs, and — despite recent murmurs of deglobalization — is only expected to grow.

This industry is enormous but continues to operate in a very analog way. Phone calls, emails, and Excel files are still used to determine and coordinate the arrival and departure times of vessels in and out of ports, and the amount of containers going on and off the vessels and into the hinterland, and the ancillary services that support such a port visit (fuel, tug services, pilot services, and the like).

Portchain brings software to the world of global container shipping — moving data around seamlessly within this interconnected network of mainline carriers, feeder carriers, and container terminals. (Lest there be any doubt, there are zero blockchains or tokens of any kind in Portchain!)

Our thesis on Portchain rests on a few key pillars:

• Domain expertise. One thing that particularly excites me about any company is when there is deep specific domain knowledge that underpins a product and a business. Domain expertise is a key driver of defensibility. There isn’t enough money in the world to buy the expertise on global container shipping that gathers around the table at Portchain daily. This is about far more than software engineering and technology.

• Massive customer ROI. The savings available to customers from the deployment of Portchain’s software are massive. One (just one) of Portchains’ benefits is a significant reduction of fuel consumption by helping coordinate port arrivals by providing better data to relevant stakeholders earlier allowing the vessels to slow down and arrive just in time. The global container industry spends $40B annually on fuel alone. It is their single biggest cost item. Portchain has demonstrated that it can save up to 9% of that fuel burn on a voyage, with a theoretical maximum potential of up to 14%. This amounts to roughly $3.5–5.5B in savings from that one product for just the container industry. Similar savings exist on the terminal optimization side as well.

• Demonstrated traction. Selling software into complex established heavy industries is extremely hard, and selling software into the shipping industry is nearly impossible. The fact that Portchain has already closed large multi-year recurring contracts with several of the world’s largest container lines as well as a wide range of container terminals, is an incredibly powerful signal that Portchain is building something of remarkable value.

• Network effects. There’s nothing new about the benefits of network effects, but they are rarely spotted in the wild. Portchain is quite certainly a company with true network effects. The more carriers and terminals onboarded, the more value all the other participants can obtain from the network. There are also network effects between terminals, given that many container routes involve multiple terminals in predictable patterns. In addition, there is already strong evidence of virality: carriers are helping Portchain to onboard terminals, and terminals are even starting to help Portchain onboard new carriers.

• Stickiness. One of the key drivers of value for enterprise software companies is stickiness. In the case of Portchain, the deep integration required into customer workflows provides reason to believe that Portchain’s software will be quite sticky. So far, churn has been virtually non-existent.

• Outstanding and deeply committed team. I’ve saved the best for last. At the core of any good early-stage investment is a high-conviction decision to back an outstanding team. Since our first interaction, I’ve been deeply impressed by the founders of Portchain: Niels Kristiansen (CEO), Thor Thorup (CCO), and Anders Olivarus (CIO) are some of the most thoughtful, most committed, and most ambitious people I’ve met. They met at McKinsey where they first encountered the container shipping business and began to formulate the plan for Portchain. They are — as my partner at Angular David likes to say — “all over it” in the best possible way. They understand this industry better than anyone, they seem to know everything about it, and they are deeply passionate about transforming it.

For all these reasons and many more, I am extremely excited to be aboard Portchain for the next leg of their journey. Fair winds and following seas!

FROM THE BLOG

A Digital Fabric for Maritime Trade
Why we invested in Portchain.

Three Keys to the Kingdom
The sometimes-competing and sometimes-aligned goals that early-stage founders must manage.

Customer-driven Entrepreneurship
Reframing the critical unlock in early-stage venture.

It’s 3am. Do You Know What Your Third-party API Calls are Doing?
Announcing our investment in Lunar.dev.

EUROPE AND ISRAEL FUNDING NEWS

United Kingdom / Generative AI. Magic AI raised $117M, led by Nat Friedman and Daniel Gross, to further develop its AI software engineer assistant.

Netherlands / FinTech. Finom raised €50M, led by General Catalyst and Northzone, to expand its banking service offerings for SMEs.

Germany / Generative AI. Rasa raised $30M, led by Paypal Ventures and StepStone Group, for its open-source conversational AI platform.

Sweden / Energy. Fever raised €10M, led by General Catalyst, for its virtual power plant (VPP) platform.

Israel / DevTools. Permit.io raised $8M, led by Scale Venture Partners, to continue scaling its no-code permission management platform.

Spanish / Generative AI. Zylon raised $3.2M, led by Felicis Ventures, for its generative AI workflow builder aimed at SMBs.

WORTH READING

ENTERPRISE/TECH NEWS

Sora unveiled. OpenAI recently introduced Sora, their model that can instantly convert text to videos that are “up to 60 seconds featuring highly detailed scenes, complex camera motion, and multiple characters with vibrant emotions.” OpenAI shared a few stunning examples. While the tech is still new and there are some imperfections in some of the videos, Sora demonstrates that AI videos and movies are possible — especially as the tech improves. The implications for Hollywood, the ad industry, and beyond are significant. “The technology could speed the work of seasoned moviemakers, while replacing less experienced digital artists entirely. It could also become a quick and inexpensive way of creating online disinformation, making it even harder to tell what’s real on the internet.” Sora is not yet widely available, OpenAI has only shared it with a select group of academics for now. Read OpenAI’s technical report for more information and to see additional eye-popping AI videos made by Sora.

The EU AI Act. The EU AI Act was approved by EU countries on February 2nd and the law now needs final sign-off from the European Parliament, which will likely take place in April. If the law goes through, it will take effect in 2026. The AI Act “puts its toughest rules on the riskiest AI models, and is designed to ensure that AI systems are safe and respect fundamental rights and EU values.” The law “bans AI systems that carry ‘unacceptable risk’, for example those that use biometric data to infer sensitive characteristics, such as people’s sexual orientation. High-risk applications, such as using AI in hiring and law enforcement, must fulfill certain obligations; for example, developers must show that their models are safe, transparent and explainable to users, and that they adhere to privacy regulations and do not discriminate. For lower-risk AI tools, developers will still have to tell users when they are interacting with AI-generated content. The law applies to models operating in the EU and any firm that violates the rules risks a fine of up to 7% of its annual global profits.”

HOW TO STARTUP

Requests for startups. YC has issued its latest request for startups, 20 categories they would like to see more of. Some highlights include: applying machine learning to robotics, new space companies, new defense tech, and a way to end cancer.

Optimizing variable compensation. For many companies, variable compensation is the largest sales expense, averaging 40% of total sales costs. Mark Schopmeyer, co-CEO of CaptivateIQ, shared three steps to help companies optimize variable compensation. The entire post is worth reading, but the section on motivating behaviors that drive revenue results is especially important. “Carefully examine your company’s goals and strategy and ask yourself: Does our incentive compensation strategy support this? You might be surprised. Companies often fail to consider the entire lifecycle of the customer when designing incentive programs. SaaS companies, for instance, should think about how to enable success beyond implementation and incentivize reps to not only make the initial sale, but also increase product adoption, showcase value and reduce churn.”

HOW TO VENTURE

The ideal VC background. Opinions vary widely on the ideal experience for a VC, ranging from considerations of age, prior work experience, to their field of study. Angular’s Gil Dibner shares his perspective on the matter. “Success in venture — if predictable at all — seems correlated somewhat to experience and apprenticeship within venture itself, somewhat to humility and fear of failure, and greatly to self-awareness and human empathy with others. (Do you know yourself and can you read a boardroom?). None of this has anything to do with age, prior job titles, or degrees of study.”

January VC funding. According to Crunchbase data, venture funding in January remained subdued. Global startup funding for the first month of 2024 reached close to $22B — slightly below the monthly average for 2023. “Late-stage funding in January topped $10 billion, while early stage came in at around $9.4 billion and seed around $2 billion. Early- and late-stage funding were both up month over month with large rounds in energy, delivery, semiconductors, quantum and logistics. Around $2.1 billion — or 10% — of January’s startup funding went to the AI sector. Large rounds in AI were raised by robotics, customer experience, voice synthesis and AI architecture companies.”

PORTFOLIO NEWS

Portchain raised $5M in a new funding round led by Angular Ventures.

Jurnee announced a new feature: individual budget tracking based on event attendance.

Firebolt is hosting a webinar on how Bigabid analyzes 30B AdTech records in milliseconds. During the session they will cover how Bigabid cut costs while accelerating queries 400X by moving to Firebolt. Register here to join.

Forter announced the appointment of Anthony Barsoom as chief financial officer and Jim Howard as vice president of sales in the Americas.

JFrog hit $5B market cap for the first time since 2021.