Ocean 14 Capital Co-founder Chris Gorrell Barnes is a blue optimist – and for good reason.
It’s been a stellar 12 months for OC14C’s Fund 1. Investments have come in – most recently EUR 30 million (USD 32 million) from IKEA via its investment arm Ingka Investments, and before that, EUR 10 million (USD 10.6 million) from the Principality of Monaco’s Sovereign Wealth Fund. Simultaneously, it has invested in Brazilian tilapia producer Tilabras Aquaculture. and Singapore-headquartered shrimp breeding tech specialist SyAqua.
“The progress has been phenomenal; it’s been full throttle,” Barnes told SeafoodSource. “Considering the headwinds and the fact that this is a new area, the fund has been incredibly successful.”
Barnes said it was significant to receive support from Monaco’s Prince Albert, who has been championing the blue economy, while the IKEA investment “feels momentous,” in that a well-known, purpose-driven organization has recognized oceans are vital to humanity’s survival.
“Both have created a buzz and got more people interested in the fund,” he said.
Since launching in November 2021, the fund’s coffers have grown to a current EUR 130 million (USD 138 million), which isn’t far from its stated EUR 150 million (USD 159.3 million) target, and another two major investors are expected within the next six weeks, according to Barnes.
There’s now a clearer understanding from informed and environmentally-led investors of the key role the ocean plays in food and job security, climate threat mitigation and planetary health, and O14C is providing them with a sophisticated, de-risk investment strategy to enter this area, Barnes said.
“The drumbeat is becoming louder and clearer. We believe the fund will exceed the EUR 150 million without doubt. And I’m confident the fund will end up at around EUR 180 million (USD 191 million) when it closes at the end of June. This will be quite a significant machine – it will pave the way for our vision of a building a very big business to transform and regenerate the blue economy.”
Underpinning the growth is a strong team of 17, said Barnes. He’s also “very happy” about the way in which OC14C’s Impact and Investment segment is working, not least its progress with SyAqua and shrimp farming.
“We’re very much focused on how we intensify the shrimp industry. We believe it’ll be a USD 50 billion [EUR 47 billion] market in the next five to 10 years, and it’s really a huge opportunity for innovation to intensify it to reduce the environmental externalities and to help farmers with job security, reducing mortality, etcetera,” he said. “SyAqua is one of the answers to that. That business is going very well, and we can see a clear pathway to it being a very significant business.”
Barnes revealed that Ocean 14 has also already identified the other shrimp investments the fund is going to make as part of its strategy to develop what he calls “data-led, technology-enabled, circular, and regenerative by design, industrial-scale platforms for the blue economy,” so that they will have impact and be valuable enough for an exit either to trade or to a large private equity (PE) firm that’s got an ESG mandate.
He’s also very excited about the “massive potential” of tilapia, which “despite being unloved in the West,” is “probably one of the most-sustainable forms of fish protein that it’s possible to create.”
Tilabras is producing under 10,000 metric tons (MT) of tilapia annually but has a license to produce 100,000 MT. These are all fed on a sustainable, vegan diet at the company’s farm site, which sits within a natural dam with a fast-flowing current.
“What we’ve done since the investment is build a processing plant so it can go from selling just whole fish to producing fillets, too,” Barnes said. “This opens up the channel for it in the U.S. We’re also looking to build the brand in the global market.”
Similarly, last year’s investment in MITO, a European clam breeder and hatchery, has taken O14C into another segment of the seafood landscape that Barnes said is under-loved and infrequently talked about, but which has a major role to play in the blue economy and ocean health.
“Again, it’s a great little company with a strong team and I think it’s going to grow into a very significant business. And again, we’ve identified the next target in that bivalve platform,” he said.
While the platform strategy is nothing new in private equity, the lack of it is one of the main reasons why big PE firms haven’t had much of a history in the blue economy space to-date, Barnes said.
Apart from a modest handful of companies, historically, most seafood businesses …
Photo courtesy of Ocean 14 Capital
