Blue Ocean Fund, managed by Paris-based SWEN Capital Partners, is on track to reach its €120m fundraise target, as more investors turn their attention to science-led investments in startups offering solutions for regenerating our oceans
- Blue Ocean fund on track to reach goal of €120m by end of Q2, and will invest in startups providing solutions to overfishing, pollution or climate change
- 50% of manager performance bonus tied to meeting impact KPIs
- There is a growing demand from private equity and venture capital investors to build scientific partnerships
- Norwegian Optoscale first startup selected, with further announcements in coming weeks
SWEN Capital Partners have raised €95m for their Blue Ocean fund, including €43m from the latest funding round, from both public and private investors, including IFREMER, Bpifrance, Macif and Crédit Mutuel Arkéa.
The fund, which aims to raise a further €25m by the end of Q2, will invest in 20-25 startups providing solutions in three areas affecting the world’s oceans: overfishing, pollution and climate change.
50% of the fund management team’s performance bonus, will be subject to achieving the impact KPIs.
Mainly European, with some flexibility to invest beyond Europe on an opportunistic basis, the companies in the fund will be selected from a pool of Series A startups, which need to “demonstrate market traction and a proven technology”, says Christian Lim, managing director of the Blue Ocean investment team.
Explaining the selection process, he says: “In selecting companies, we apply two filters. The first looks at their ability to demonstrate systemic impact in one of three things; overfishing, pollution or climate change.
“The second, digs deeper to see if the innovation they propose could be catalytic in transforming industries such as sustainable seafood, ocean data, solutions to plastic pollution, marine renewable energy and the decarbonisation of shipping. These are the industries undergoing the greatest transformation thanks to innovation,” Lim adds.
He explains that his team also looks for companies that have aligned their financial performance with generating impact.
“Their impact needs to be intrinsically linked to the business success of the company, which is why we do not need to arbitrage between impact and financial returns,” adds Lim.
The first startup to be backed by the fund is Norwegian company Optoscale, which has developed underwater cameras to measure and monitor the weight and health of farmed fish to improve productivity as well as to reduce their environmental footprint.
Noray Seafood, a Spanish indoor aquaculture company focused on sustainable shrimp farming, has also received funding from the fund, with further investments expected to be announced over coming weeks.
Science meets finance
Speaking to Impact Investor from the One Ocean Summit in Brest, Brittany, Jérôme Delmas, managing director of SWEN Capital Partners, says that their science-led approach, in particular their recent partnership with IFREMER, the French ocean science research institute, was gaining interest from the industry, adding there is growing demand from private equity and venture capital investors to build scientific partnerships.
He says: “I am convinced that the future of these types of impact funds in the private equity market will rely on close partnerships between financial and scientific experts.”
Romain Charraudeau, director of partnership and transfer for innovation at IFREMER, which invested €5m in the fund’s second funding round, says that he hopes the return on investment from the Blue Ocean fund will lead to further opportunities for much-needed investment in other startups to bring them to scale.
“There are an estimated 1000-1500 startups in the marine space, working to regenerate our oceans, and this number is growing every day. Science can breed solutions but to accelerate these and build them to scale, we need finance,” he says.
The institute, which is under the joint authority of three French ministries from which it receives funding, is a member of SWEN Capital Partners’ Impact Governance Committee and will also be on hand to offer its expertise to the startups selected.