The seaweed industry is young and immature outside of Asia, and for now, investments are minimal compared to investments in finfish or shrimp aquaculture (where in turn, investment barely registers compared to land-based agriculture). However, investments are growing.
Looking at our own (global) records of seaweed investments for 2020 and 2021, we notice a number of trends.
The number of deals is going up, but the median deal size went down in 2021, which reflects the fact that more startups are entering the field, raising smaller pre-seed and seed rounds. The total invested amount has stayed largely similar, but keep in mind some deal sizes are not disclosed, while numbers for traditional bank financing are also not available, so this number is a very rough estimate.
On the whole, we can see an increase in the number of both seed as well as early venture capital rounds.
While about half of investors don’t have a specific investment focus, or limit themselves to local companies (like many government funds), it’s interesting to have a look at the investors that do have a specific thesis. Funds and accelerators focusing on food systems, the ocean and the climate are pulling the cart.
Leaving aside business angels and incubators, what type of investors are finding their way to the seaweed industry?
While corporate and VC investments naturally dominate the space, the number of family offices, nonprofits, government funds and impact investors is notable, reflecting the investment community’s belief that sustainable seaweed production can contribute towards the SDGs.
What part of the value chain?
A majority of the companies that have raised money are already vertically integrated to some extent: most seaweed producers are also processing their own crops into finished products. Companies building biorefineries to level up the processing step have been able to attract considerable investment, as well as a few startups working on the infrastructure side.
When it comes to the type of applications, some are attracting more capital than others. Food, feed and bioplastics have seen the most deals in 2020 and 2021.
Who attracts capital?
When it comes to the leadership teams that capital favours, investors are leaving a lot of money on the table by funding almost exclusively companies with a male CEO, despite a growing number of female CEOs and all-female founding teams.