Exclusive: Propeller has backed 14 ocean-focused startups

image

Illustration: Aïda Amer/Axios

Propeller, a VC firm focused on oceans and climate, closed its inaugural fund at $117 million and has invested in 14 portfolio companies, the firm tells Axios exclusively.

Why it matters: That investing pace highlights the growing interest in harnessing oceans to fight climate change.

Details: Boston-based Propeller has invested in eight startups developing technologies around ocean carbon capture.

  • Deals include San Carlos, Calif.-based Ebb Carbon, which uses electrochemistry to remove CO2 from seawater; Canadian river carbon removal startup CarbonRun; Cambridge, Mass.-based Aquatic Labs, which makes ocean sensor tech; Canadian ocean imaging startup Coastal Carbon; and Israeli ocean carbon removal company Rewind.
  • "The ocean is a super hero," for carbon capture, says managing partner Rodrigo Prudencio, who joined the firm last year after co-founding and leading Amazon's Climate Pledge Fund.

Yes, but: The portfolio isn't all carbon capture.

  • One startup, Circle Seafoods, will soon deploy a mobile barge that can instantly freeze fish caught by Alaskan salmon fishers, eliminating major waste from the supply chain.
  • Propeller also backed Navier, the electric "flying" hydrofoil boat company that Axios took a spin on last week.

Catch up quick: Propeller was co-founded by former HubSpot co-founder Brian Halligan and first launched in October 2022. Halligan is also an LP in the fund.

  • "I think to get good returns and have an impact, you have to go deep in one area," and become "a magnet for entrepreneurs," he says. "We've done that in oceans."
  • The firm invests in early-stage startups with check sizes between $500,000 to $2 million. The partners' rough estimate is they want to back between 30 and 40 startups from the fund.
  • A key to connecting with entrepreneurs is Propeller's partnerships with ocean research groups like Woods Hole Oceanographic Institution.

Of note: Propeller also created a novel "Ocean MBA" program, a crash course and networking event around ocean science and entrepreneurship. Many of the firm's portfolio founders have participated.

Big picture: The ocean as an investment category includes massive industries like maritime shipping and fishing.

  • Large parts of the global population also live near coasts and will need to figure out how to adapt to the changing climate.
  • Propeller's inaugural fund illustrates how investors and governments are becoming increasingly interested in ocean tech and the blue economy.