Investment and Innovation in Canada’s Ocean Economy

By Priya Bala-Miller

Last week, I found myself whisked up to the top of the Vancouver Lookout to attend Blue Tech Connect, an ocean venture and investment convening hosted by COAST, Canada's Ocean Supercluster, and the Ocean Startup Project. With sweeping views of Vancouver Harbor on unceded traditional əlilwətaɬ (Tsleil-Waututh) territory, bustling with cruise ships, seaplanes, and container terminal activity, this was a fitting setting to contemplate the future of Canada’s ocean economy. 

I was struck by strong similarities between nature finance in both marine and terrestrial environments. Most significantly, we heard that capital seekers need to be crystal clear on how projects generate value, who pays for those outcomes, transparency around metrics, and alignment with investors’ impact goals. 

From the Hub’s vantage point, the Blue Economy represents massive untapped potential for innovation and experimentation with novel financing arrangements that will help the country achieve expectations that 30% of oceans in Canada will be protected by 2030 as a key strategy for stemming biodiversity loss. 

Specifically, the sessions at Blue Tech Connect featured an aptly named Oceanside Chat featuring the leaders of Blue Action Canada and its host organizations COAST, Founders Factory (London, UK), Blue Action (Bahamas); final Pitches from participants in Canada’s first blue-economy focused accelerator Blue Action Canada; and a panel discussion on Blue Economy Investment Opportunities. 

Here are my top four takeaways: 

There is value in leveraging embedded assets for nature-positive impacts 

Experts in attendance spoke about the value in leveraging embedded assets to advance sustainability in the ocean economy. For instance, in the case of new Hub Partner TELUS, the Pollinator Fund’s investment approach relies on leveraging the firm’s core business—its technology capabilities—to serve the scaling of business opportunities and social impact benefit. In practical terms, this means they deploy VC funding as a financing tool, coupled with commercial agreements between investee companies and a Telus Business Unit who can support the solution to scale. 

Similarly, the San Diego Port Authority’s Blue Economy Incubator (BEI) is predicated on leveraging their in-house expertise on issues such as permitting to lower barriers to entry for promising ocean-related innovation. 

Innovation potential is high but sustainability assurance around ocean ventures remains important 

Panelists reflected on the importance of government support and early stakeholder engagement as vital ingredients for success on the road to commercialization of sustainable oceans-related ventures. In part, B.C.’s track record on these two fronts has positioned it well in the eyes of investors keen to invest with sustainability outcomes in mind. Additional investment attractiveness features include the mindset of a local population and government that understand the merits of climate action and decarbonization, a strong talent ecosystem, and ambitious, complex projects. 

However, among all this heady optimism, I’d caution that the investment ecosystem needs continued vigilance to guard against ‘blue-washing’ risk. ‘Blue’ is not ‘green’ and we should all be disciplined in avoiding the temptation to interpret all ocean based economic development as inherently regenerative. This space has all the vulnerabilities associated with projects that do not track biodiversity-related metrics with scientific rigor, or indeed bring Indigenous ways of knowing to bear on impact storytelling. A good point to amplify here is that investors do not expect investee companies to have a reporting burden that outweighs their size and capacity. Measurement, data and reporting sophistication should move in tandem with operational and financial sophistication. 

Creativity abounds on our shores 

The most exciting part of this morning was hearing investment pitch presentations from the Blue Action Canada Accelerator Program. As the nature nerd in the room, a few solutions that impact biodiversity conservation, stewardship or protection caught my attention:

• Seacork Acoustic Panels - Founder Annie Dahan’s premise is provocative and powerful. What if our building materials were regenerative rather than destructive? Spurred into action by the statistic that 13% of global CO2 emissions annually stem from the materials used in our buildings and infrastructure, Dahan’s team has developed a proprietary material from locally sourced invasive seaweed species to create biodegradable acoustic panels (current versions are not and end up in landfills). While she has a compelling narrative on circularity, her business case could also be enhanced with robust data on additionality achieved across a broader range of impact metrics, including biodiversity. 
• Ocean Aid’s Marlin Box:  Over the past few years, this startup supported First Nations by using AI-assisted technology to detect and map over 1,200 ghost fishing traps for targeted retrieval and identify thousands of shoreline plastics, enabling the removal of over 7,000 lbs of marine debris. Unfortunately this model did not sustain funding, and the team has pivoted to commercial markets such as sport fishing, with a commitment to ensure every sale supports ocean restoration through the removal of 10lbs of ghost gear and ocean plastic from Canadian coastlines. However, if commercialization of more effective detection technologies contributes to overfishing, then the firm will likely have to consider the scope of defensible claims on net positive impacts. 
• 7 Leagues Leather: This woman-owned start up uses discarded fish skin waste from local food producers as feedstock to create a renewable, bio-based leather that is also plastic free. The tanning process relies on tannins produced by plants to protect against bacteria and fungi. The emphasis on circularity at this firm is important in light of market data cited by 7 Leagues Leather which suggests that the fish leather market, estimated at $32 million (USD), is growing 5-6 times faster than the conventional leather market. 

Investors need sharp clarity on project value and impact

Panelists spanned investors representing pre-seed, seed and commercial-ready segments. They were candid in sharing that capital seekers need to be crystal clear on how projects generate value, and ultimately who pays for those outcomes. Crucial to this is transparency around baseline scenarios and metrics, along with a clear explanation of value addition in ways that align to an investor’s impact thesis.This point is not unique to the marine context, as the Nature Investment Hub see this mirrored in land-based nature finance vehicles as well. Investors are also keen to learn from each other on motivation for adopting some return seeking strategies over others (for instance revenue shares versus equity positions). 

Oceans offer infinite potential for innovation and impact. We need to leverage embedded assets for nature-positive impacts, remember the importance of sustainability assurance, draw on our creativity and innovation, and stay laser-focused on value and impact so investors can put their dollars towards protecting our oceans and biodiversity. 

"The Hidden Ocean, Arctic 2005: July 25 Log" by NOAA Ocean Exploration & Research is licensed under CC BY-SA 2.0.