A new breed of investors is starting to shape business growth across the globe. These impact investors, as they are often called, look to put money into businesses that generate strong financial returns as well as environmental or social benefits.
In the past decade alone, impact investors poured millions of dollars into new innovations, helping grow businesses like Stonyfield Farms, Zipcar, and Grameen Bank. These companies, in turn, help shift the way business is done in their fields. But despite their strong interests in healthy food, the environment, and local community growth, impact investors have made very few investments in sustainable seafood.
With a $390B market in wild capture fisheries, a $120B market in fish farming that is predicted to grow exponentially in coming years, and numerous businesses poised to take advantage of growing consumer interest in the quality and origin of their food, what keeps investors from engaging in the seafood sector?
Last summer, together with leaders in the impact-investing field, we set out to answer this question and find new ways to connect sustainable seafood businesses with the capital investments needed to expand their enterprises. Through our research, we found that investors were only seeing four to five viable business proposals a year: a number too low to make the kind of comparisons that would help them evaluate deals or reduce risk in their investment portfolios. They had the false impression that the fisheries and aquaculture sectors were too specialized, too complex, and without enough strong business ideas to merit building expertise in this area into investor teams.
At the same time, after years of working as consultants to sustainability-oriented fisheries businesses, we knew that there were entrepreneurs with viable business ideas out there. They just weren’t making meaningful connections with investors. To bridge this gap, we created Fish 2.0, a business competition that brings sustainable seafood businesses together with interested investors. Businesses compete for cash prizes and the opportunity to pitch their ideas to investors.
Along the way, the entrepreneurs are paired with expert advisors – often investors themselves – who provide advice on how to improve, package, and pitch business ides so that they attract investors. In turn, investors in the Fish 2.0 network see more viable businesses in a month than they used to find in an entire year. Over 80 businesses entered the competition in March, confirming our belief that the lack of investment has more to do with access and communication than a lack of good ideas.
The Fish 2.0 Judges will narrow this list to ten semi-finalists and ten finalists this fall based on both their investment potential and their ability to improve the long-term sustainability of ocean resources and communities. The businesses in Fish 2.0 span the seafood supply chain, ranging from technical innovations that enable people to catch and farm fish with fewer environmental impacts to marketing services that help fishermen keep a bigger proportion of the profits from their catch.
Examples include companies that bring fresh, local fish from the dock directly to customers in a weekly delivery; offer new technology to tag and track fish so that retail stores like Walmart can verify the origin and sustainability of their fish; create new products from fish clippings that are typically wasted; and engineer systems to farm seafood using less fresh water and energy. The more investors get involved with Fish 2.0, the more they learn.
Investors in the Fish 2.0 network now tell us that fishery investments are not that different from investments they make in land-based agriculture and food systems. For example, the businesses face similar issues working within complicated supply chains and government policies. Most importantly, investors see that fisheries are a natural fit with their impact investing portfolios. They are right. Most of the businesses we see in Fish 2.0 have sophisticated, proven business models. They simply need capital to expand their businesses so that they become more profitable and can reach a scale that allows for the broadest and deepest environmental and social impacts.
I will feature some of these businesses, their leaders, and potential investors here over the course of the next several months. By sharing examples of success, we hope to inspire more minds, more entrepreneurs, and more investors to get involved in shaping the future of the seafood industry. We believe the business growth and exchange of ideas we are fostering with Fish 2.0 will create faster innovation and expansion in sustainable businesses that can help protect our oceans for the long haul.
Please join these conversations and become part of our growing network by signing up for our updates at www.fish20.org.