Organizations supporting the ocean economy in Atlantic Canada are working to increase equity funding for oceantech companies, and they’re heartened by the growth of international funds targeting maritime innovation.

Malcolm Fraser, CEO of Innovacorp, said during the recent pitching competition at Start-Up Yard at COVE that he’s been in touch with several funds that focus on oceantech. He believes Atlantic Canadian companies are on their radar.

The discussion about funding in the ocean sector is meaningful because the region’s oceantech companies so far have attracted little equity capital. Fraser and others say this is a young sector and he’s witnessing growth both in oceantech companies and the funds that back them.

“When you look around the world, there are a number of funds that have come along in the last few years that are in this space,” said Fraser in an interview.

“There’s no question from a global point of view there is a significant amount of capital that really likes the blue challenge. There’s an understanding that we have to make sure our oceans and the companies in them are cleaner, safer and better.”

In the few years that the region’s oceantech community has been growing, the ecosystem has developed and the number of startups has increased. At the end of 2020, Entrevestor counted 101 oceantech companies, about two-thirds of them no older than two years.

The challenge the sector has had is in attracting capital. The big funding event in the ocean space last year was Kraken Robotics’ $10 million raise by selling stock on the TSX Venture exchange. Other than that, according to our preliminary figures, we found only $2.1 million in investment from private capital sources. In 2019, the sector had raised $3 million in equity funding.

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Innovacorp’s Fraser is optimistic about the outlook for funding in this space for several reasons.

First, there are more and more venture capital funds dedicated to or interested in backing ocean technology, such as Fynd Ocean Ventures in Norway, BlueOcean Ventures of Switzerland and S2G Ventures of Chicago and San Francisco.

Second, there is a growing awareness that humans need to be better stewards of the planet, and that new technology can increase the care of the oceans. That means impact funds and family offices in particular are interested in channeling capital into new technologies that make money while improving the health of the oceans.

“You can do both things – you can make money and solve ecological problems at the same time,” said Fraser. “That is the type of mindset that is prevalent in this sector and that is one of the most important characteristics as to why this is an interesting sector.”

Finally, there are local groups and individuals backing startups producing ocean technology, and their involvement is likely to grow.

“In the past year, Innovacorp has made over $3 million in ocean investments,” Fraser said. “And in two years we have gone from 17 companies in our potential pipeline to over 80. Many of these are really early stage, but it gives you a sense that the activity in the sector is growing aggressively over two years.”

Another group that is working to channel capital into oceantech companies is the Creative Destruction Lab, a program lasting several months that brings together promising companies with “fellows”, who are both mentors and investors.

CDL-Atlantic is now conducting its first Oceans stream, working with oceantech companies from Atlantic Canada and other jurisdictions and having them work with fellows specializing in ocean industries. Jeff Larsen, the CDL-Atlantic Site Lead, said the program has attracted mentors from Norway to California, and though the main focus is mentorship, many startups are showing the fellows they are focused, adaptable and can scale their ventures.

Said Larsen: “By demonstrating these skills and characteristics many relationships turn into investment opportunities, and we have seen this in CDL oceans with several financings already completed and many in progress.”


Disclosure: Innovacorp is a client of Entrevestor.