New venture capital fund to invest $100 million in decarbonising oceans

Boston-based fund Propeller will focus on start-ups developing tech to remove carbon dioxide from the ocean, decarbonise shipping and improve efficiency in marine industries

A ship at the container terminal in Hamburg, Germany. Boston-based fund Propeller is aiming to decarbonise shipping and improve efficiency in marine industries, among other innovations. Reuters

A new $100 million venture fund is teaming up with one of the world’s leading marine research institutes to invest exclusively in ocean technologies that can help solve the climate crisis.

Boston-based Propeller will focus on start-ups developing tech to remove carbon dioxide from the oceans, decarbonise shipping and improve efficiency in marine industries, among other innovations. The firm will also invest in companies looking to tap ocean microbes and other organisms to produce energy, pharmaceuticals and other products.

When it comes to mitigating climate change, “the ocean is doing most of the heavy lifting already,” said Brian Halligan, founder and partner at Propeller.

The oceans produce 50 per cent of the planet’s oxygen and absorb about a third of the carbon dioxide produced from the burning of fossil fuels. But little of the billions of dollars investors have poured into climate technologies has been devoted to ocean-related solutions.

“I think in many cases it’s been hard to make the case for enough profit potential to get the VCs interested, that there’s a unicorn out there,” said Mark Schrope, director of Schmidt Marine Technology Partners, a San Francisco-based organisation that issues grants for the development of early-stage ocean tech. Part of the Schmidt Family Foundation established by Wendy and Eric Schmidt, the former Google chief executive, Schmidt Marine Technology Partners is not an investor in Propeller.

Mr Halligan, the co-founder of software company HubSpot, said that rather than chase unicorns, Silicon Valley’s elusive billion-dollar start-ups, Propeller is pursuing “narwhals” — companies developing game-changing ocean technology.

Key to that strategy is the fund’s partnership with the Woods Hole Oceanographic Institution, whose scientists will receive “substantial” grants from the Propeller fund to develop ocean climate technology that can be commercialised.

The WHOI is itself a 4 per cent partner in the fund, and Propeller will also get a first look at the WHOI’s intellectual property.

“It's important to have skin in the game,” said Peter de Menocal, a marine geologist and paleo-oceanographer who serves as the WHOI’s president. “I told [Halligan] that we needed a risk capital fund to put our scientists and engineers to work on these bigger, complicated projects that relate to ocean climate solutions.”

Mr Schrope said such a partnership could give ocean scientists a path towards commercialising their discoveries, something that has long existed for other fields, such as biotech.

Mr Halligan said Propeller raised its fund from wealthy individuals and institutions and has made three investments so far. He declined to identify the recipients but said one is working on technology to cut emissions from shipping while another is developing a way to extract lithium from seawater for use in electric vehicle batteries. The third is creating a suite of ocean sensors.

“We pay very close attention to the science on a viable path forward around carbon dioxide removal,” said Propeller partner Julie Pullen, a climate scientist and oceanographer. “We also think that there’s underlying technologies associated with building those markets, for instance monitoring, reporting and verification to substantiate that the carbon sequestration is happening.”

Scientists have criticised past carbon removal schemes, such as dumping iron sulphate in the ocean to stimulate the growth of carbon-absorbing plankton, as geoengineering that could have catastrophic unintended consequences.