Seaweeds are attracting more attention, be it for their myriad of uses, their potential to mitigate climate change and ocean eutrophication, or as harmful algal blooms that need to be captured and processed before they suffocate the world’s beaches.
We keep an eye on the seaweed startup world and visualize the trends we notice below, and in our seaweed investment tracker. If you want to dig deeper into particular companies, you can dive into our database views for seaweed startups and scaleups.
Why the number of seaweed startups is set to grow
There are some people who claim that the current enthusiasm for seaweeds is reminiscent of the hype in the 1980’s, when oil prices were high and algae oil was seen as the future, until oil prices dropped and policy makers lost interest. We disagree for a number of reasons.
Firstly, unlike oil prices, the urgency around climate change, ocean eutrophication and the plastics crisis is not going to disappear anytime soon. Secondly, the growth in (seaweed) aquaculture is part of a wider trend called the Blue Acceleration where, driven by increasing consumption patterns, the decline of land-based sources and technological progress, the marine realm is seen as the next economic frontier, resulting in considerable investments.
While there has rightly been an emphasis on the downside risk to the Blue Economy of unbalanced, inequitable and unsustainable investment decisions in the ocean, in our opinion (and that of the world’s most eminent seaweed scientists), investments in responsible seaweed cultivation offer a way to contribute positively to the Blue Acceleration and the SDGs.
Surveying the landscape
We define a seaweed startup as a company that is innovative and oriented towards rapid growth. Broken down by founding year, it’s clear that the number of seaweed startups is growing – as evidenced by the autumn 2021 cohorts of various ocean startup accelerators. The inflection point came around 2015.
The seaweed industry is a fledgling industry outside of its traditional stomping grounds of Asia. That is obvious when looking at the big amount of pre-revenue startups (research or pilot stage) compared to scaleups (validation and scaleup stage).
Looking at the seaweed value chain, more than half of all startups and scaleups are transforming seaweed biomass into higher-value products, and growing and/or harvesting the seaweeds is also well-represented (about one-third of high-growth companies are vertically integrated to some extent).
Breeding and processing the seaweeds is usually done by the growers themselves for now, although some are trying to innovate in this area. Distribution is a clear gap that needs more startups, especially knowing the many inefficiencies that make it difficult for seaweed producers to sell their crops at market value.
Seaweeds are mostly used for food by startups and scaleups, as you would expect. Surprisingly, bioplastics comes in second place – it remains to be seen how many of these startups can survive.
A string of startups has popped up in the Caribbean as a response to the Sargassum tides. In Southeast Asia, innovators are often trying to improve the existing seaweed farming systems supplying the world’s big hydrocolloid producers. Beyond those, it’s Europe, the US and Australia that produce the most startups.
We have a limited knowledge of what is happening in China, Japan and Korea. Feel free to get in touch to let us know what we are missing.