Shipping logistics software startup Bearing nabs $7M

Bearing, an AI software maker for logistics companies, raised $7 million in a follow-on round from its seed investors, the company exclusively tells Axios.

Why it matters: Upcoming regulations could boost software adoption among hidebound, century-old shipping and logistics companies.

Details: Existing investors Mitsui & Co. and AI Fund participated in the follow-on round after leading the company's seed round in 2019.

• The funding comes via convertible note with a "significantly higher" valuation cap than the 2019 all-equity round outlined, CEO Dylan Keil tells Axios, though he declined to share the cap specifics.

How it works: Bearing uses existing vessel data and combines it with other inputs like weather, wind, and ocean-current information to estimate a vessel's energy efficiency on a given route.

• Its customers are primarily global shipping companies that pay via subscription for access to its software, as in a traditional SaaS model.

State of play: Global shipping and logistics networks have struggled to weather volatility over the past two years, contributing to substantial supply chain disruptions.

• Though some challenges are easing for shippers, new regulations taking effect in January 2023 could again slow maritime logistics networks to a crawl.
• The upcoming regulations require logistics companies to monitor performance and emissions output for each vessel within a larger fleet. Vessels with failing ratings will incur fines and will ultimately have to be replaced.
• The easiest way to improve a vessel's score, however, is to drastically slow its speed to burn less fuel.

Yes, and: Logistics is a heavily cyclical industry that endures high peaks and deep valleys.

Yes, but: After years of high demand and higher profits, many have money to spend on software upgrades and proactive measures ahead of the regulation implementation.