The blue economy -- cultivating and harnessing the power and promise in the waters that cover 71% of the Earth's surface -- is the focus for one of the next big waves in climate innovation according to investors and entrepreneurs.
The opportunities for investment and innovation are still in their early days -- but finding ways to manage, maintain and harness the liquid resources that are essential to life on earth are getting their due.
With natural disasters like floods and drought occurring with increasing frequency -- and while the world reckons with a plastic pandemic choking planetary waterways -- demand for innovation around water and ocean ecosystems has never been higher.
As we wrote just last month, cities across the country are scrambling to deal with issues of drought and flooding that are among the worst North America has seen in 1,000 years.
Los Angeles is setting a target to reclaim 100% of its wastewater in an effort to provide nearly all of the city's water needs locally. In Chicago, Gross Wen Technologies is using an algae-based water treatment tech to remove and recycle nitrogen and phosphorous from a anaerobic digester facility. The tech should capture CO2 and increase wastewater treatment efficiencies.
Gross Wen is just one of the companies that's being guided through its potential growing pains by ImagineH2O, a non-profit organization focused on bringing new water preservation, reclamation and monitoring technologies to market.
That could look like Gross Wen's algae-based treatment system, or, in Panama City, the development of a waterless toilet from Change: WATER Labs and its chief executive, Diana Yousef. These toilets help keep groundwater clean for communities that lack access to clean drinking water and provide necessary sanitation services.
Or it could look like BlueConduit's smart system for line inventory and reporting that's tracking lead pipe replacement and monitoring in the Southeastern U.S.
Finally, in Detroit, Julie Bliss Mullen, the chief executive and co-founder of Aclarity is building a business that uses electrochemical treatment to destroy contaminants in wastewater.
Once these water companies hit their stride, investors at funds like Burnt Island Ventures are there to ensure that the fledgling companies can get even more of the funding they need to grow.
The fund recently closed on $30 million to invest exclusively in new technology companies focused on protecting our water supply. It's a crucial area for investment according to the firm's co-founder Tom Ferguson.
“With the explosion of money going into climate tech, $40 billion [in 2021 alone], only $400 million is going into water, or 1%,” Ferguson says.
If there's only a trickle going into investments into shoring up the world's water supplies -- there's a flood of dollars heading out to sea.
“The ocean is a $100 trillion market opportunity,” Adam Draper, managing director at BoostVC and a seed investor in Coinbase, told a guest columnist for the food and agriculture-focused publication, AgFunder. “This is the largest untapped investment opportunity in my lifetime.”
These days entrepreneurs and investors are focused on main categories of investment, which mirror many of the terrestrial concerns that folks are trying to address. These are the big buckets of climate investment (at least as we see them at FootPrint Coalition): mitigation, adaptation, and restoration.
For Daniel Kleinman, the founder of the Seaworthy Collective, and a marine robotics expert turned investor and venture studio founder, the new push for technologies focused on the oceans and water represents a newfound understanding that solutions to the climate crisis can be found... under the sea.
"We see the ocean [and the] blue economy as an opportunity to go beyond sustainability and mitigation to drive environmental regeneration and solve problems at their root," Kleinman said. "The key drivers behind the development of a regenerative blue economy are highly impactful and scalable solutions that have inherent synergies for growing ecosystems and economies in parallel. Businesses in this space see opportunities to integrate nature-based solutions with technology to not only quantify [but] magnify their impacts."
Investment from The World Bank, a global financial investor affiliated with the United Nations, already totals multiple billions of dollars and the markets that ocean and water-focused companies are pursuing total in the trillions.
Oceans absorb one-third of the human population’s carbon emissions and are heating much faster than scientists had expected (look at last week's record temperatures in the Antarctic).
Beyond their climate mitigation potential, oceans sustain roughly 3 billion people on the planet with food and the foundations for economic prosperity. Even this critical role is under stress. About 90% of marine fish stocks are either depleted, over-exploited or fully exploited and the aquaculture, which fills that gap creates its own industrial hazards.
Still, ocean technology comprises a fraction of the booming agrifoodtech sector, which saw an increase in investment deals by as much as 34.5% year-over-year in 2020. In terms of innovation, this is a massive blind spot.
That's, in part, because the world's oceans represent potential sources of carbon sinks, food, materials, and critical adaptation mechanisms that can solve multiple problems.
Those carbon sinks include geological solutions as well as industrial (sustainable) aquaculture of plants and animals which offer alternatives to material for food and clothing, and the potential production of materials to replace energy intensive industrial materials like cement.
Critically, these new, offshore industries will require new tools to monitor and manage the development and impact of large scale production will have -- and provide early warning systems to prepare for the kinds of climate emergencies that rising sea levels, melting ice caps, and stronger ocean storms will have on populations around the world.
Nonprofit organizations like AltaSea, Ocean Exchange, and Ocean Visions and investment firms like Aquaspark, the newly launched Indico Blue Fund, Katapult Ocean, SeaAhead, and the Seaworthy Collective are all at the forefront of developing these ocean-facing technologies.
We're also supporting new research and innovation around water resources. Through our Science Engine collaboration with Experiment.com, we're funding projects like Cliff Kapono's research into the interdependent relationship between indigenous island inhabitants and the coral reefs in the ocean waters that surround them.
At Ocean Visions work is underway to accelerate the development of technologies and nature-based solutions that can capture and remove carbon dioxide from the atmosphere. It's a critical mitigation tool to blunt the worst impacts of global warming by removing more of the heat trapping gases from the atmosphere.
"The potential for employing the power of the ocean to sequester and safely store carbon dioxide is enormous, relative to that of land-based counterparts. Why? The ocean covers 71% of the earth; it naturally cycles and stores carbon safely at the bottom of the sea; and has far fewer social and political controversies/ramifications than many land-based approaches," wrote Brad Ack, the chief innovation officer of Ocean Visions, in a recent post.
"Ocean-based CDR can take a number of forms, from growing marine ‘trees’ like kelp and other seaweeds, to accelerated weathering of minerals that interact with seawater, to ocean iron fertilization, and more. Ocean-based CDR pathways aim to store carbon in the deepocean—in contrast to the excess CO2 in the upper layers of the ocean, which causes ocean acidification. And ocean-based CDR may be a 'two-fer,' in that while directly addressing the root causes of the climate crisis (by removing legacy CO2 pollution), it also directly addresses the largest cause of our ocean crisis (damage driven by CO2 pollution)," Ack wrote.
Meanwhile, the investment firm Katapult and AquaSpark are seeing plenty of opportunities in ocean-based agriculture and fish farming.
“The solutions offered by seaweed cultivation cannot be underestimated. On a societal level, seaweed offers a fast-growing, sustainable alternative protein for a growing global population. This is coupled by the sector’s potential to mitigate the worst effects of the climate crisis," wrote Katapult investor Ross Brooks. "Seaweed farms are a scalable tool for carbon capture and they hold the ability to absorb excess nutrients entering the ocean from agricultural runoff.”
So far, Katapult has invested in 6 seaweed based companies: Ocean Rainforest (DK/US), Oceanium (UK), Algaeing (GE/Israel), 12 Tides (USA), Oregon Seaweed (USA) and SoftSeaweed (No). We are actively looking to add more startups through our startup accelerator programs, which recruits twice a year.”
As startups pitch these carbon-sucking and ocean farming solutions, a new batch of companies will have to provide tools to monitor and manage these projects. And investors are spending hundreds of millions of dollars on these monitoring tools as well.
Last year, the robotic ocean mapping and monitoring company Saildrone hauled in $100 million from financial backers to build out its drone-based ocean knowledge network. Around the same time, Sofar Ocean raised nearly $40 million for its own, buoy-based take on ocean sensing.
Last year, FootPrint Coalition’s nonprofit made a grant to Sofar Ocean’s philanthropic project - called Aqualink - which deploys solar-powered, satellite-connected buoys around the world to volunteers who can manage them.
“We helped Aqualink develop a Marine Heat Wave Tracking program across that network of buoys, since heat waves take place in the ocean just like they do on land," said FootPrint Coalition co-founder and managing director of non-profit and science, Rachel Kropa. "Sensors have a lot of potential when it comes to water, from everything like tracking home water utilization, to disease detection in wastewater (as we saw with COVID), to sensing stress on aquatic life from these marine heat waves. I think we have just started to scratch the surface of all the technology that might help us understand the depths of humanity’s relationship with the water on Earth.”
Brian Glazer, a professor of oceanography at the University of Hawaii, Manoa, and the founder of a water monitoring startup Hohonu, is building his company to reduce the barrier to entry for sensors focused on water questions.
"In 2019 we launched Hohonu as a public-private startup to address some of that demand [for data]," said Glazer in an interview earlier this year. "A lot of the innovations coming out of silicon valley haven’t been applied to oceans and climate."
Hohonu chief operating officer Kevin Mukai agreed. "In 2021 there was tons of money flying into environmental technology and climate things -- and disproportionately into direct air capture and "sexy" technologies to save the planet and kick the can down the road a bit," Mukai said. "More investments in oceans will probably start to catch up to that."