Ocean 14 Capital plans June final close for debut 'blue economy' fund

Harriet Matthews
15 February 2023

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Impact growth investor Ocean 14 Capital is anticipating a final close for its debut EUR 150m fund in June 2023 following the addition of IKEA-backed Ingka Investments to its LP base, founding partner Chris Gorell Barnes told Unquote.

The blue economy-focused Ocean 14 Capital Fund I has raised EUR 130m to date and held a EUR 80m first close in November 2021, according to a press release.

The firm is seeing "significant" demand for the fundraise and expects to exceed its EUR 150m target, Gorell Barnes said.

The firm's investment thesis has gained traction among LPs, Gorell Barnes said, accompanied by a growing understanding of "the key role that the ocean plays in mitigating the climate crisis, job security and food security, and the huge opportunity in the blue economy, which has been slow to be understood by capital markets."

"For future funds, we will inevitably be looking at larger sizes and focusing on more institutional capital," said Gorell Barnes, adding that the "final push" for the fundraise will also focus on institutional investors.

In addition to Ingka Investments' EUR 30m commitment, the fund has secured a EUR 10m commitment from the Principality of Monaco's sovereign wealth fund. It also has the backing of Chr. Augustinus Fabrikker, Builders Vision, the Minderoo Foundation, British entrepreneur Alex Beard and Swedish entrepreneur Niklas Zennström, according to the press release. The European Investment Fund (EIF) is the vehicle's anchor investor, Gorell Barnes said.

Blue economy opportunity
Ocean 14 Capital's investment focus on the blue economy covers two key themes, Gorell Barnes said: food security, which involves supporting the development of "blue" foods and aquaculture; and protecting and restoring ecosystems, which is centred around recycling, collecting and sorting ocean plastics, as well as the role that seaweed can play in industries including pharmaceuticals and nutrition, he said.

The fund will provide tickets of EUR 5m-EUR 15m for growth investments, with EUR 1m-EUR 5m available for late-stage venture, Gorell Barnes said. The fund will reserve 30% of its capital for follow-on investments to support the growth of its platform companies, he added.

It will typically target businesses developing new technologies in ocean-related industries, including fisheries, vessel monitoring and disease protection. Although the most transformative technology is typically found within B2B models in the industry, Ocean 14 will also assess opportunities in alternative proteins and businesses creating sustainable brands across the "blue food" sector with D2C models, Gorell Barnes said.

Target companies will have technology with a strong proof of concept, as well as proof of recurring revenues and a proven customer base, Gorell Barnes said. Their business models will need to be scalable to both address the problems that the ocean is facing, as well as to be appealing for a potential exit to a private equity sponsor or via an IPO.

The fund made four investments over the course of 2022 and is assessing dealflow from its network, including inbound approaches from companies, Gorell Barnes said. The vehicle expects to make 20-25 investments in total and will deploy two thirds of its capital in Europe, with the remainder for the rest of the world.

The fund invested USD 12m in Singapore-headquartered shrimp breeding and nutrition technology developer SyAqua in June 2022. In the same month, it announced its investment in Norway-headquartered industrial plastics recycling firm AION, a spin-off of krill harvest business Aker BioMarine.

Impact goals
The "14" in the firm's name refers to the 14th theme of the UN Sustainable Development Goals (SDGs), Life Below Water, which is "arguably the most important goal" given the interconnectivity of the ocean, Gorell Barnes said.

The firm's debut vehicle is an Article 9 fund under the EU SFDR, with 30% of its carried interest tied to achieving impact KPIs on individual investments, Gorell Barnes said.

"Every business undergoes vigorous impact modelling and financial modelling," he said. "We won't invest unless the business is in line with our impact methodology, and we also won't invest if the management team doesn't sign up to our impact action plan."

Gorell Barnes co-founded Ocean 14 Capital alongside George Duffield, fellow co-founder of marine conservation NGO Blue Marine Foundation, as well as Gottex Fund Management's Max Gottschalk.

The firm's in-house impact assessments are led by head of impact Hugo Le Breton, whose prior experience includes consultancy Xynteo and Shell.