A Beacon of Hope in the Shipping Industry?: Jeff Bezos invests in more efficient shipping solutions
June 23, 2020
2 min read
What's going on here?
Jeff Bezos has invested in Beacon, a UK-based digital logistics company that aims to disrupt the freight forwarding and supply chain finance industries.
What does this mean?
Established in 2018, Beacon was founded by CEO Fraser Robinson and COO Dmitri Izailov, both former Uber executives. Beacon’s initial seed round attracted Uber founders Travis Kalanick and Garrett Camp, and former Google CEO Eric Schmidt. According to Fraser Robinson, Beacon aims to improve the freight forwarding experience for importers and exporters worldwide. It does so by using AI, search, optimisation, data science, cloud and automated technologies to simplify and digitise a highly fragmented industry, which unlocks operational efficiencies.
On 31 May 2020, Beacon reported that it raised over $15m in its first fundraising round from investors including Amazon’s Jeff Bezos and US venture capital firm 8VC. As the first fundraiser after the seed round, this signifies that they have, at minimum, a viable product available. This funding was intentionally executed during the COVID-19 pandemic, to leverage the growing global digitalisation of services, and increased investor enthusiasm for technology solutions.
What's the big picture effect?
Beacon intends to invest its funding into new hires, technology, and market expansion. In this regard, Jeff Bezos’s investment not only demonstrates his confidence in Beacon’s ability to deliver its desired disruptive solutions but also forecasts the potential of the shipping industry. Already valued at a combined $12tn a year, Amazon’s support represents an optimistic expectation that this value is set to increase in the coming years.
From the wider perspective, travel bans and lockdown measures from the COVID-19 pandemic has seen factories closing, affected manufacturing supply chains, and limited goods transportation. Amidst this, companies must secure their consumer base by maintaining its speed and quality of deliveries, while keeping costs low to mitigate losses. Beacon resolves these issues in two ways. Firstly, the cost of acquiring materials and manufacturing is lowered. Secondly, it is cheaper to deliver products to clients, many of whom will rely on online purchasing and doorstep delivery because of lockdown measures. Furthermore, Beacon’s ability to improve supply chain finance is added relief for importers, as it reduces the cash deficit that arises from suppliers demanding payment upfront before shipping goods – an important function amidst COVID-induced cash crunches.
Overall, while the shrinking economy and reduced business opportunity for many, Jeff Bezos’s investment in Beacon is an affirmation of the adage “someone’s loss is always another’s gain”. Businesses will look to keep a firm lookout for gaps in the market, and opportunities to capitalise on the massive disruption caused by COVID-19.
Report written by Matthew Poon
Share this now!
Check out our recent reports!