Assembling our first ocean portfolio

With Blue Action’s strategic home in the Bahamas, we had a powerful case study for a community that relies so heavily on its ocean and coastal habitat. It also sits on the frontline of climate change and experiences its most adverse effects.

Sourcing investments was based on a hypothesis of ‘How can we build a more resilient island nation?’. Our experience of problem solving through venture building and investing, combined with Blue Action’s local expertise and first-hand experience in the Bahamas, positioned us well to build a portfolio that addressed this hypothesis. 

Seagrass was one such area. The Bahamas is home to the world’s largest seagrass forest, covering an area the size of Portugal. It’s not just the thousands of species of wildlife that this seagrass houses that makes it so important, it also stores vast amounts of blue carbon. 

ACUA Ocean is consciously monitoring threats to seagrass habitats. They’re building a fleet of unmanned hydrogen-powered ocean surface vessels for data collection, one focus being marine conservation such as metocean data and water and air quality, as well as applications in offshore infrastructure, maritime, and defence and border control. 

Adjacent to seagrass, we also recognise the huge potential in building out the market for blue carbon, just as we’ve seen the consolidation of the carbon credits market in recent years. Ocean Ledger is building a scalable approach to coastal natural capital accounting, helping quantify the value of blue carbon ecosystems as well as providing measuring, reporting, and verification (MRV) through satellite observation, field data, and AI. 

We identified carbon capture not just as an environmental benefit but as a revenue stream for islands. Investing in Jeevan was an opportunity to back a deeply-qualified, science-backed team and help them commercialise and scale a technology that could be critical to tackling climate change. They’ve discovered a new method of direct air capture (DAC) which turns captured CO2 into baking soda which, when released into the ocean, helps reverse ocean acidification. 

While much focus has been on offshore energy and infrastructure, there’s been less focus on how island nations power their grid to ensure, in particular regarding access to clean energy. DRIFT Energy is an exciting alternative to offshore—green yachts that can harness wind, wave, and solar energy and convert it into hydrogen which can be distributed to ports on underserved island nations. 

These economies are highly reliant on maritime and shipping, an industry burdened by carbon emissions and crying out for decarbonisation. Armada tackles one of the direct causes of emissions—the ships themselves—through an air lubrication system that reduces fuel consumption and emissions from ships.

Climate adaptation featured prominently in our search for investments. In particular, helping hotter climate environments adapt and remain resilient in the face of rising temperatures. AtmoCooling is doing just this, using a novel cooling technology to influence ambient temperatures that can help transform coastal deserts back into thriving hubs of agriculture, clean energy, and habitation. 

We were also interested in businesses that could think holistically about threats posed to the ocean, in terms of both input and output. Soarce demonstrated this, creating materials at the intersection of nature and performance. They’ve shown how natural resources like seaweed can be deployed to create more durable products, while simultaneously decreasing use of synthetic materials like plastic that pose a threat to ocean environments. 

Despite our efforts to cover numerous challenges that faced island nations, a portfolio of 8 will inevitably leave certain gaps. Wider challenges around island resilience and sustainability feel like a massive opportunity, ranging from maritime to utilities to transportation. Ocean Carbon Dioxide Removal (CDR) was another area that emerged a lot, and will certainly be an area we’ll continue to look to invest in. Similarly, aquaculture was another area high on our agenda: although we found this was just not as big in the Bahamas as it might be in other geographies, where we may be likely to invest in the future. 

There are also areas where the market has simply not progressed far enough—such as waste management or noise reduction—where we remain poised to invest should the right company at the right stage come along.