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Stellar
Acquisition III Inc.

c/o
Ellenoff Grossman & Schole LLP

1345
Avenue of the Americas

New
York, NY 10105

August
14, 2018

VIA
EDGAR

U.S.
Securities and Exchange Commission

Office
of Information Technologies and Services

100
F Street, N.E.

Mail
Room 4561

Washington,
D.C. 20549

Attention:
Folake Ayoola, Special Counsel

 Re: Stellar
Acquisition III Inc.

Amendment
No. 1 to Registration Statement on Form S-4

Filed
June 11, 2018

File
No. 333-224227

Dear
Ms. Ayoola:

Stellar
Acquisition III Inc. (the “Company”, “we”, “us” or “our”)
hereby transmits its response to the letter from the staff (the “Staff”) of the Securities and Exchange Commission
(the “Commission”), dated July 19, 2018 (the “Comment Letter”) regarding our Amendment No.
1 to our Registration Statement on Form S-4 (the “Registration Statement”) previously filed on June 11, 2018.
For ease of reference, the numbered paragraphs below correspond to the numbered comments in the Comment Letter, with the Staff’s
comments presented in bold font type. Capitalized terms used but not otherwise defined herein have the meanings ascribed to such
terms in the Registration Statement. We have today filed with the Commission Amendment No. 2 to the Registration Statement (“Amendment
No. 2”), reflecting a number of updating changes and, to the extent indicated below, our responses to the Staff’s
comments. A marked version of the Registration Statement, in the form filed with the Commission today, is being transmitted to
the Staff identifying all changes between Amendment No. 1 and Amendment No. 2 to the Registration Statement.

As
a preliminary observation, we note that certain of the Staff’s comments relate to disclosures in the Registration Statement,
while other comments relate to Phunware’s proposed future offering of PhunCoin and inquire into the specific securities
law compliance provisions applicable to such an offering. Although it is Stellar’s intent to include in the Registration
Statement all information material to its shareholders in connection with the proposed business combination and related transactions,
certain other information may not be immediately material to the investment and voting decisions to be made by its shareholders,
such as how Phunware may, in the future, determine to structure a PhunCoin offering. Because Stellar is a special purpose acquisition
company, it is required to have the Registration Statement declared effective within a relatively short period of time in order
to be able to distribute the final proxy statement/prospectus to its shareholders in connection with its special meeting of shareholders.
The failure of Stellar to consummate the business combination prior to the applicable deadline will require Stellar to liquidate.
Because the considerations relating to Phunware’s anticipated future PhunCoin offering are not so time constrained as the
shareholder vote, we believe it may be helpful to address in this letter the comments of the Staff specifically related to disclosures
in the Registration Statement. With respect to the Staff’s comments relating to Phunware’s future PhunCoin offering
that are not directly related to the Registration Statement, we are transmitting as a separate letter the response of Goodwin
Procter LLP, Phunware’s counsel in connection with the PhunCoin offering (referred to herein as the “Goodwin Letter”).
We hope that this bifurcation will assist the Staff in reviewing the Registration Statement while at the same time providing the
Staff and Phunware an opportunity to engage in a dialogue relating to matters outside the scope of the Registration Statement.
We believe this approach will best suit the interests of the shareholders of Stellar.

Securities and Exchange Commission

August 14, 2018

Page 2

General

 1. The
                                         current balance in your trust account does not meet the minimum cash asset level condition
                                         set forth in the Merger Agreement. Please disclose the current status of any additional
                                         financing or modifications to the Merger Agreement that will allow the business combination
                                         to proceed.

Response:

The
Company has revised the disclosure on page 8 of the Registration Statement to provide as follows:

Stellar
does not currently have sufficient cash, including funds in the Trust Account, to satisfy the $40 million minimum cash asset level
condition in the Merger Agreement required for the closing of the initial business combination. Unless Stellar is able to obtain
sufficient additional financing, or Phunware agrees to modify or waive the minimum cash asset level condition, Stellar will be
unable to satisfy the conditions to the closing of the initial business combination, and the initial business combination will
not occur. Stellar is currently seeking additional financing to permit it to meet the minimum cash asset level condition in the
Merger Agreement. In addition, it has had discussions with Phunware regarding a possible reduction of the minimum cash asset level
condition. Whether Phunware will agree to a reduction may depend upon the amount of additional financing, if any, that Stellar
is able to secure. At the date hereof, Stellar has not received any commitment for additional financing, and Phunware has not
agreed to any reduction of the minimum cash asset level condition. There can be no assurance that Stellar will be able to obtain
sufficient additional financing to satisfy the minimum cash asset level condition, that such financing will be available on acceptable
terms or that Phunware will agree to modify or waive such condition.

Securities and Exchange Commission

August 14, 2018

Page 3

Frequently
Used Terms, page 1

 2. Please
                                         define Token Generation Event and PhunCoin.

Response:

The
Frequently Used Terms section of the Registration Statement has been revised to include definitions of “PhunCoin”
and “Token Generation Event”.

Questions
and Answers for all Stellar Shareholders and Phunware Stockholders

Q:
What will Phunware’s stockholders receive in return for the acquisition of Phunware by Stellar?..., page 18

 3. We
                                         note your response to prior comment 7 and your revised disclosure that the parties are
                                         reviewing whether any amendment or waiver is required under the Merger Agreement to cure
                                         any ambiguity. To the extent the Merger Agreement is amended, please revise your disclosure
                                         to also summarize the amendment. Additionally, please clarify how you intend to determine
                                         that the token generation event or the launch of PhunCoin will not affect the merger
                                         consideration. For instance, please clarify whether you intend to segregate the funds
                                         received from the rights offering and token generation event. If you or Phunware are
                                         accepting digital assets with or in lieu of fiat currency, please tell us how you will
                                         assess your progress towards the $100 million requirement given the ongoing fluctuation
                                         in the digital asset valuations.

Response:

If
the Merger Agreement is amended, we will revise the disclosure to summarize the amendment. We will also include the
amendment as an annex to the proxy statement/prospectus. The parties have discussed the effect of the rights offering and the
token generation event (“Token Generation Event”) on the determination of the merger consideration and expect that, if
an amendment to the Merger Agreement is executed, it will provide that, for computation purposes, neither the assets
resulting from the sale of rights or pursuant to the Token Generation Event, nor the liabilities associated therewith, will
be included in the determination of the merger consideration. The parties have not discussed any segregation of funds or
similar arrangement. The valuation of digital assets (Bitcoin or Ethereum) received in the rights offering for PhunCoin will
be valued in the USD equivalent at the time at which the digital assets are received into PhunCoin Sub’s digital
wallet. The digital wallet and blockchain has the capabilities of viewing the USD equivalent at the time of transfer. To
illustrate, this would be similar to the investment by an investor who sent a foreign currency to Phunware's USD bank
account. The value will represent the number of PhunCoin rights based on the USD equivalent received by Phunware.

Please
note that there is no requirement for Phunware to raise $100 million in a Token Generation Event.  Section 5.20 of
the Merger Agreement only requires Phunware to use commercially reasonable efforts to consummate a Token Generation Event
with cash gross proceeds of at least $10 million and no more than $100 million.

Risk
Factors, page 40

 4. You
                                         state on page 190 that PhunCoin will be a digital asset built and transacted on top of
                                         an existing blockchain technology, which you do not intend to create. Please provide
                                         a risk factor regarding your reliance on another blockchain network. For example, disclose
                                         the risks and consequences to the company if such network ceases to function, slows down
                                         in functionality, or the possible impact of any fork on PhunCoin.

Response:

The
Company has revised the disclosure on page 76 of the Registration Statement to include a risk factor with respect to PhunCoin’s
reliance on another blockchain network.

Securities and Exchange Commission

August 14, 2018

Page 4

 5. If
                                         Regulation A is available to you in connection with the distribution of PhunCoin to consumers
                                         in exchange for their agreements to provide certain benefits to the company, including,
                                         but not be limited to, enriching their personal data with additional information and
                                         participating in marketing campaigns that will assist you to deliver increased value
                                         to customers, please consider providing risk factors related to your business model,
                                         such as risks of privacy data breach and cybersecurity attacks. Please advise how you
                                         will value such data for purposes of calculating the ability to use Regulation A for
                                         that distribution. Alternatively, consider revising your disclosure to make clear that
                                         you intend to distribute PhunCoin pursuant to an offering either registered or eligible
                                         for an exemption from registration under the Securities Act.

Response:

The
Company has revised the disclosure on page 76 of the Registration Statement to include a risk factor with respect to risks of
privacy data breach and cybersecurity attack.

With
respect to the Staff’s comment regarding valuation of data with respect to PhunCoin, please see the Goodwin Letter.

Stellar
Proposal 1: The Redomestication Proposal

Comparison
of Shareholder Rights Before and After the Redomestication, page 110

 6. We
                                         note your response to prior comment 13. Please clarify whether a derivative lawsuit under
                                         the Delaware law, but alleging violations of the Securities Exchange Act of 1934, would
                                         be restricted to Delaware Chancery Court, or whether such claims may be heard in either
                                         Delaware Chancery Court or federal district courts

Response:

Once
a stockholder has established the right to bring a derivative action on behalf of a corporation under Delaware law, we understand
that derivative claims against third parties, including claims alleging violations of the Securities Exchange Act of 1934, may
be brought in any court having jurisdiction over the matter. However, this view may not reflect settled law, and we would hesitate
to express a view in the Registration Statement. We note that the interplay between the federal securities laws and state laws
is complex and may depend on the nature of the pleadings and the specifics of the matters being considered by the courts. See,
for example, the recent Supreme Court decision in Cyan, Inc. v. Beaver County Employees Retirement Fund (Sup. Ct., March
20, 2018), which related to the Securities Act.

Securities and Exchange Commission

August 14, 2018

Page 5

Stellar
Proposal 2: The Stellar Business Combination Proposal

Background
of the Business Combination, page 117

 7. We
                                         note your response to prior comment 15. Please expand your discussion to provide substantive
                                         details of the negotiations between the management and advisors of Stellar and Phunware,
                                         including whether either party initially offered a differing amount of merger consideration
                                         as well as when material aspects of the merger agreement, such as the proposed token-generating
                                         event and minimum $40 million cash and cash equivalent balance for Stellar, were negotiated.

Response:

The
Company has added additional disclosure to pages 118-121 of the Registration Statement.

Projections,
page 118

 8. We
                                         note your response to prior comment 15 regarding Phunware’s non-GAAP revenue projections
                                         through 2020. Please provide more detail with respect to how these projections were determined,
                                         as they represent significant growth factors of 126% in 2018, 39% in 2019, and 38% in
                                         2020. Additionally, please clarify the assumptions, trends, business developments and
                                         actual experience that led Phunware’s management to support the projected growth
                                         factors disclosed. Further, please clarify in your prospectus, as noted in your response
                                         letter, that the Phunware revenue projections were presented on a consistent basis with
                                         Phunware’s historical GAAP revenue or disclose any material differences.

Response:

Phunware
has updated the disclosure on page 122 of the Registration Statement to reflect the Staff’s comment.

Satisfaction
of 80% Test, page 120

 9. Your
                                         responses to prior comments 17 and 20 indicate that your board’s evaluation of
                                         the fairness of the $301 million merger consideration was based, in part, on a 15-50%
                                         blockchain technology premium based on your “internal analysis.” Please describe
                                         this “internal analysis,” including how you derived the 15-50% premium range
                                         as well as the determination to apply the 15% value to Phunware.

Response:

The
Company has added additional disclosure to pages 122-123 of the Registration Statement.

Securities an