Introduction
When someone thinks of air pollution causes, they might immediately imagine cars. But water-based transportation is also taking its toll on the environment. One large ship can release as many hazardous chemicals as 50 million cars, and pollution from just 15 of the largest ships available can equal that of all the cars in the world put together.
As a maritime technology company that cares about both the environment and the shipping industry, Magnuss is determined to help both coexist in harmony. Its patented sail, the Magnus VOSS, is a wind-based propulsion system that considerably cuts down emissions from sea transportation. We reached out to co-founder, COO, and Director Edward “Ted” Shergalis to hear more about who is supporting the company and how Magnuss helped out other companies from early on.
Note: This interview was conducted over phone and email. It has been lightly edited for clarity and length.
What inspired you to take the leap and start Magnuss?
My partner, James Rhodes, and I have been friends for more than 20 years. And we founded Magnuss to solve the fuel and emissions problems facing the global shipping industry, an industry and opportunity we felt deeply passionate about and uniquely qualified to address.
Who is on your team and how did you come together?
Bound by history and a singular vision, our senior team has worked together for decades, drawing on deep, hands-on expertise in maritime shipping, clean tech, renewable energy project development, finance, software development, and data analytics. CEO, co-founder, and veteran executive James Rhodes holds an MBA from Columbia University and a BS in electrical engineering from Brown University, and he has more than 30 years of experience in maritime shipping, renewable energy development, project finance, investment banking, and management consulting. As COO, co-founder, and tech entrepreneur, I hold a BA from Harvard University and leverage expertise in shipping and early-stage, high-growth business development, software, analytics, and operations.
Magnuss is supported by a broad network — experts from academia and the industry. The board of directors and commercial advisors bring extensive experience to drive growth. Magnuss collaborates with industry participants, such as ship owners, charterers, shipbuilders, and financial institutions. Magnuss continues to forge ties with the strongest, most influential shipping organizations to ensure commercial success at scale.
How is Magnuss transforming the maritime transportation industry?
Magnuss is a maritime technology and project development firm that provides a wind-based propulsion system for global shipping to reduce fuel consumption and emissions. The system is a high-tech sail called the Magnuss VOSS, or Vertically-variable Ocean Sail System. It’s an example of a modern technology that offers remarkable fuel savings at a time when minimizing costs, reducing fossil fuel use, and complying with current and future legislation are crucial.
What does the competitive landscape look like, and how do you differentiate?
The competitive landscape is lean. Several firms exploring soft sails, rigid sails, and kites are inferior to the Flettner rotor-based systems, such as the VOSS, because they exhibit a lower lift coefficient and a higher cost per pound of thrust. A few competitive sail systems have emerged while falling short of delivering a robust, high-quality product applicable for modern shipping needs.
What have you currently achieved in the development of your product?
After nearly a decade of extensive investment in design, certification, patents, and customer validation and drawing on shipping operational and technical expertise and support, Magnuss is ready to expand! Patented across 16 countries, the Magnuss VOSS is approved by Lloyd’s Register, the UK classification society, meaning the design meets the highest standard for quality in global shipping. We have a full-scale ship deployment plan in place through our joint industry work with ship owners, charterers, and shipyards. And our savings and performance analytics have been verified by Lloyd’s Register in its newly released 2021 report.
Can you tell us about a time you have been scrappy for Magnuss?
Like most startups, Magnuss has had to be strategic and scrappy to achieve major milestones and lead the industry toward a cleaner, greener future with modest investment resources. Early on, for example, we were able to work with much more established ship routing software providers by directly coding our proprietary wind assist propulsion savings algorithms into their systems and articulating the value to them even before we had a first ship on the water. I learned this approach in my previous experience starting an analytics software business and have seen the benefits time and again of integrating with larger vendors.
How do you intend to use the money you raise this round to scale the business?
Today, Magnuss is seeking capital as it continues in collaboration with industry partners, spanning the next 12 to 18 months to develop one of the largest ever wind-based propulsion projects and unlock customer demand for more fuel-efficient dry bulk shipping.
What do you want potential investors to know about you and/or your company?
Ship owners/operators are laser-focused on eco-efficiency ahead of tighter regulations. Magnuss is set to deliver a reliable, best-in-class technology and an investment opportunity with global impact. Our scalable business model is ready to meet immediate customer demand, delivering significant and quantifiable fuel savings and affording a short payback period. Bottom line savings are meaningful, especially on a line item that represents a large fraction of a ship’s annual operating expense. In an industry facing increasing regulatory pressure, an important benefit of the VOSS is the degree to which it creates not only economic value but also large-scale carbon emission reductions.
As you think about the business 5-10 years down the road, what do you see exit opportunities looking like? Have you set any future goals for the company?
Magnuss was established to address the major problems facing the global shipping industry, with a focus on energy consumption and environmental impact. Our goal at Magnuss is to transform the world’s cargo fleet into a more efficient, low-cost, low-pollution means of ocean transport. We aim to lead the shipping industry in a more cost-effective and sustainable direction, capturing a significant market share of today’s commercial fleet.
We look forward to seeing where Ted and his team take the company. Magnuss is currently raising on StartEngine.
