Hello Ocean Friends,

If you noticed I’m not on my usual publishing schedule, I appreciate your readership and attention to detail. The end of the school year, beginning summer, and the end of the Summit has me doing a lot of “Dad-ing” including a quick vacation with the kids. So thanks for reading along.

This week we’re up with the next Person-to-know interview. This time with my brother Conner Lachenbruch. CIV has a very specific and focused thesis and I love it. Read Conner’s interview below.

Best,
Will

People-to-know: Conner Lachenbruch of Conservation International Ventures

Will: Conner, thanks for taking the time. Tell me a little about you, who you are, the organization you work for, and what you guys are doing.

Conner: My career began in the traditional finance realm, working for five years in New York at a bank and then at a hedge fund before getting into impact investing with a focus on the Global South. I’ve spent the last half-dozen years doing that work, becoming more and more focused on specific elements of impact investing that I think are most interesting and exciting.

That led me to my role at Conservation International Ventures on the Oceans Investing team. 

For anyone who knows me, they would tell you I was always going to end up in the ocean space. First, I grew up in San Diego, California, near the ocean. I’m an avid surfer and scuba diver and want to invest in and spend my time on something that I care deeply about protecting.

Secondly, we know the ocean has a huge impact on the climate, and it is largely underinvested. I won’t cite the numbers for you or your readers, hopefully, most already know them. A space that has lots of potential and is generally not given enough attention is a place I want to build the rest of my career around.

The final piece of this is CI’s geographic focus. As anyone who pays attention to the impacts of climate change can attest, it will have the greatest effects where people do the least to contribute to it. Even thoughSan Diego is my home base, I’ve spent a lot of time in those areas and will continue to work to improve things in those regions.

Will: Talk to me a little about Conservation International Ventures. What do you guys do? Where is your focus?

Conner: CI Ventures is the impact investing arm of Conservation International, which has been around since 1987. The unofficial motto of Conservation International is Protecting Nature for People. A lot of folks view conservation as something nice for nature. Save the Whales is an effort for the whale’s sake. It’s underappreciated how nature - the trees, the oceans, mangroves, and coral reefs, the health of those ecosystems - actually directly contributes to the health of humanity.

If you protect the mangroves and coral reefs, you are actually protecting the people who rely on them for their livelihoods. This means that whatever subsector we are investing in - aquaculture, fisheries technology, alternative materials, invasive species, biodiversity - the outcomes of the business will support local livelihoods. At the top of all our investment memos are two components: what positive change will this create in nature, and how will this positively impact people?

Will: Cool. Talk to me about the startups, companies, or technologies that you're deploying capital into, whether debt, equity, or some mix thereof. Where’s the sweet spot for you? Is it early? Is it late? Is it deep tech? Is it software?

Conner: Our best-case scenario is that we find a company with incredible impact potential that might struggle to get off the ground or get through a bridge phase because they don't look or feel like a traditional VC opportunity. We provide capital to get them through that phase and then go back to other venture investors and say, “Hey, remember that company you thought was too early, too risky, or not venture-backable? Well, we invested in them, got them through this phase, and guess what? They have now hit some of the milestones  you are looking for.” If they are impressed with the progress and invest, then we’ve done our job.

Across our portfolio, for every dollar we’ve invested, we’ve catalyzed about $9 to $10 worth of follow-on or co-investments. That’s one of our primary metrics of success. 

We also know that traditional VC equity financing is not the best instrument for all startups, particularly in the ocean space. What CIV does is use instruments like revolving credit lines, working capital loans, term loans, equity, or combinations of those, to structure an investment that matches the risk profile of the company.

We want to sit across the table from the entrepreneur, assess where they are in their journey, and provide the right tool for them at that time. This is extremely beneficial to startups, rather than trying to fit a square peg in a round hole by operating like traditional venture equity investors, just because that’s what we were taught.

Finally, we focus on businesses with operations in the Global South. The people in these regions did the least to contribute to climate change but are getting hit the hardest by it.  Also, these areas still maintain some of the richest stores of carbon and biodiversity the world has to offer.

Will: Very cool. Tell me a success story, not necessarily KPIs or numbers, but a human success story of a company Conservation International invested in and the impact or growth that came after.

A company we’ve invested in called Coast4C is a great example. They're working across coastal communities in the Philippines to build a more sustainable and equitable seaweed supply chain. We met when they were just beginning to commercialize the idea that seaweed farming could be both climate-positive and community-led. At the heart of their model are hundreds of small-scale farmers, many of whom are women, who have traditionally been paid inconsistent or unfair prices for their labor. Coast4C is flipping that by building long-term partnerships with those farmers, paying fair prices for higher quality product, and providing access to higher value international markets..

We stepped in to invest right after Super Typhoon Odette hit the Philippines and wiped out 90% of Coast4C’s infrastructure.  For many of the coastal families they support, seaweed farming isn’t just a job, it’s the alternative to fishing with harmful practices like dynamite or bottom trawling, which are devastating to coral reefs and marine life. We knew our investment at that time would be more critical than ever for nature and the communities it supports. Part of our funding allowed them to offer direct financial aid to farmers and rebuild stronger. 

Since our investment, Coast4C has been a finalist for the Earthshot Prize and has taken their company back from $0 to over $1M in ARR.

Will: We're in a weird time. AI is the buzzword in Silicon Valley and things are happening in Washington that we’ve never seen before. During all this, why the Blue Economy? Why the Global South? Where will we be in the next five, ten, fifteen years?

Conner: As an organization, we try our best to catalyze funding into awesome, impactful companies . Often, when we engage with investors and discuss our work in the Global South and emerging markets, many say, “Those areas are too risky, too unpredictable.”

What we’ve seen over the past few months, with purposeful measurement, is that investing in traditional U.S. markets might be just as, if not more, unpredictable and challenging as the areas we invest in across Peru, South Africa, or Indonesia.

Why wouldn’t you invest in something early on, where five years down the line, whether it’s Africa, Asia or South America, you’re talking about exploding economies and ecosystems? We’re at the very early stages of that. We look five years down the line and plan to continue investing in companies that have sold a valuable product, faster, better, cheaper, or more beneficial for people than the alternative, and in areas that are on a clear growth trajectory in terms of their economies, populations, and entrepreneurial ecosystems

The areas we focus on, and the areas I think will be the most investable in five years’ time, whether they’re integrating AI or not, are businesses that are improving people’s lives, not just a business’s bottom line. And that doesn’t have to mean a seaweed farmer in the Philippines. More than 3 billion people rely on the ocean for their livelihoods, the vast majority in developing countries.  If that isn’t a big enough market, I don’t know what is. The core of what we do at Conservation International Ventures, investing to support people’s livelihoods, will continue to be an incredible investment thesis.

When a startup is helping people directly, you’re going to have natural buyers. You’re going to have natural investment opportunities. Emerging markets are called “emerging” for a reason; they are nascent, but on the fastest growth trajectory.

Will: For the BlueX readers, what’s your ask? Who are you looking for, and how can they reach you?

Conner: Entrepreneurs who are building businesses around the ocean that are either based in or operating in the Global South, you don’t have to be based there, as long as your operations are. Yes, we’re absolutely looking to talk to you.

On the investor side, our role in the ecosystem is to catalyze more investment into ocean ventures. So if anyone is curious about how to build out their portfolio, their ocean investing program, or wants to learn about examples of things that have and haven’t worked,, we’re happy to talk about opportunities out there that we think are super promising.

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Reach out to Conner through LinkedIn or learn more on the Conservation International website.

Or meet him at the Progression Conference on July 30th.

OceanTech Fundings

🔋 Echandia, a battery systems for marine vessels company, raised $34M from S2G with Klima, Industrifonden, SEB Greentech VC and EEI. | More from Geek Wire

🤖 Underwater vehicle company Bedrock Ocean raised $25M in a Series A-2 round led by Primary and Northzone, with Autopilot, Costanoa Ventures, Harmony Partners, Katapult, and Mana Ventures. | More from TechCrunch

🦪 Hailia, a company that transforms underutilized fish materials into new dishes, raised €1.75M led by Holdix and Ikorni Invest. | More from EU Startups News

☔️ Xatoms raised a $3M Seed round to pilot projects to purify water with quantum chemistry. | More from BetaKit

💡 UV-C LED disinfection company AquiSense closes a Series A led by Burnt Island Ventures. | More from CleanTechnica

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