Sustainable Ocean Alliance
Identifying Sustainable Blue Economy Gaps
By: Daniela V. Fernandez, Founder and CEO, Sustainable Ocean Alliance
The sustainable blue economy holds great promise for impact investors. The ocean investment landscape is expanding, with increasing avenues to explore. Yet gaps remain.
Scaling is proving to be a challenge across venture stages. Further, funding for diverse leadership, women founders and co-founders is limited compared to their male counterparts.
In general, for-profit ocean businesses are overlooked by VCs and philanthropy alike. The most underfunded UN Sustainable Development Goal (SDG) is SDG 14, or “Life Underwater.”
Family offices have a role to play in bridging the fiscal gaps by integrating the ocean into their investment hypothesis.
Challenges Across Investment Stages
Challenges are present across all stages of a startup’s journey in the sustainable blue economy.
Sustainable Ocean Alliance (SOA) and affiliated venture fund Seabird Ventures are pioneers in the early-stage, ocean investment space. Since 2018, they’ve supported 56 Seed to Series A companies, awarding a cumulative $4.66M to a diverse pool of visionary founders and grantees.
Despite support from SOA and others, companies that manage to secure initial funds may still struggle to overcome the venture capital “valley of death.” In the ocean space, Series B companies and beyond usually require significant support to pilot their solutions. This can prove challenging for a variety of complicated and costly reasons.
Most countries strictly regulate the use of their oceanic territory or exclusive economic zone (EEZ). Well-intended rules meant to conserve marine ecosystems can prove dated and burdensome to navigate for sustainable innovators looking to disrupt existing business models. Once these challenges are overcome, remoteness, unpredictability, and treacherous conditions at sea can drive unforeseen costs. Given such unique challenges, validating proof of concept can become extremely costly, presenting a barrier to scaling beyond a venture’s early stages.
ReOcean Fund is focused on helping ecopreneurs overcome this unique barrier. Others like Ocean 14 Capital (a €160M fund, launched in late 2021) focus on late-stage ocean health companies.
Collectively, ocean ventures need investment across stages to grow and scale. Philanthropy can help fill the gaps in the patchwork of financing prospects available to founders to ensure a continued pipeline of viable solutions and overall maturation of the ecosystem.
Diversity, and Women Founders and Co-Founders
Women founders still receive less than 3% of all VC funds, with even less going to women of color (<1%). When the lens is expanded to include women co-founders, (in the U.S.) that number jumps to nearly 23%. This leaves a 27% gap to reach 50% and achieve gender parity.
From a philanthropic perspective, the numbers are equally problematic. Less than 2% of philanthropic giving goes to women and girls, and less than half a percent to organizations serving women of color.
The only fiscally sound next step is getting more capital into the hands of diverse women ecopreneurs. Of note, women are better stewards of funding, generating 78% more revenue per invested capital. As such, a swell of financing for women would provide a better return on investment for impact investors, family offices, and VCs.
The ocean innovation space mirrors this broad VC and philanthropy trend. Female founders and co-founders express similar barriers to successful scaling. In the alternative protein, plant-based, and food tech sectors, for example 80% of surveyed women founders encountered gender bias in fundraising. As such, women-led associations are springing up and placing an intentional focus on fostering female leadership, such as Future Ocean Foods, with 40% women-led member companies.
Sustainable Ocean Alliance is establishing a model for the ocean ecosystem at large. Half of all SOA EN startups are female-founded or led, and 56% of all SOA grant initiatives have been female-led. A nonprofit founded and led by a minority, female founder and CEO, it is in the organization’s DNA to lead by example and open doors for diverse women leaders in climate.
Funding Sustainable Development Goal (SDG) 14
Family offices are encouraged to take stock of their current climate-giving thesis, as funneling funds in this direction has never been of greater importance. Despite the urgency of the crisis, global, philanthropic climate giving has plateaued at only 2% (approximately $5-9 Billion).
Similarly, ocean conservation received just 9% of financial flows into nature-based solutions in 2022, or approximately $8 billion USD. Meanwhile, SDG 14 will require $175 Billion annually in investments to achieve sustainable ocean outcomes by 2030.
This immense funding gap is gravely consequential, especially considering the recent landmark report, in which scientists conclusively stated climate and ocean health are inextricably linked.
Redirecting even a single percentage of philanthropic giving to climate, and specifically, the ocean, would stimulate the sustainable blue economy, with ripple effects for generations.
For general inquiries about Sustainable Ocean Alliance and Seabird Ventures, connect here.