Restoring the Ocean While Growing Industry

In Part 1, Beyond Impact and UMITO Partners discussed the thinking and philosophy behind their decision to develop the ocean-focused impact fund Blue Frontier Fund (BFF). In Part 2, we go deeper: into the specific technologies and investment themes BFF is targeting, the fund’s exit strategy, the opportunity in the Japanese market, and the concrete vision behind the new economic model BFF calls the “New Blue Economy.”

Six portfolio companies had turned blue — the logic pulling impact investing toward the ocean

We turn to the concrete vision behind the “New Blue Economy” and the specific technologies and investment themes BFF is targeting. In Part 1, you mentioned that Beyond Impact did not start as an ocean-focused fund. What drew you toward the blue economy in recent years?

Sagar Tandon (hereafter “Sagar”): As I mentioned, the blue economy was not originally part of our investment strategy. But at a certain point, when we stepped back and looked at our portfolio, we realized that six companies were already operating in the blue bioeconomy space. One was working with microalgae ［1］; another was leveraging cyanobacteria and marine bacteria. Others were developing plant-based or cultivated seafood［2］, or bio-based ingredients derived from seaweed and microalgae.

That realization led us to examine the ocean sector with far greater depth and intentionality. What became clear was this: blue cannot exist without green, and green cannot exist without blue. Terrestrial life, marine life, and the global climate system are deeply and inextricably interconnected. Treating them as separate domains is no longer analytically sound.

Shunji Murakami (hereafter “Murakami”): The more we have looked at the ocean through the work of UMITO Partners, the more visible that complex interdependence becomes. Rising ocean temperatures, deteriorating water quality, ecosystem degradation, biodiversity loss — all of these are structurally connected.

Sagar: At the same time, we noticed something else. Compared to themes like forests, terrestrial biodiversity, and decarbonization, the ocean is dramatically underrepresented in climate investment conversations, despite being one of the most critical systems involved. That imbalance was clearly reflected in capital flows. Companies developing plant-based meat alternatives had already attracted significant commercial investment. Companies developing plant-based or cultivated seafood alternatives had received a fraction of that.

Murakami: What do you think explains that disparity?

Sagar: Fundamentally, the degree of challenges vary depending on these developments. Developing cultivated seafood from complex marine organisms is scientifically far more challenging than developing cultivated meat from bovine cells. The technical barrier slows innovation and makes it harder to attract capital. The downstream consequence has been the progressive weakening of the marine food systems that billions of people depend on. However, we see that difficulty as the opportunity. The players who engage seriously and early with this frontier are the ones positioned to lead the next generation of marine food systems.

In practice, we have barely begun to explore this frontier. Microalgae and seaweed, for instance, are resources of extraordinary versatility and sustainability — yet their potential remains largely untapped at commercial scale. And when you look globally, a large number of countries consume almost no seaweed and have developed almost no industrial applications for it.

Solutions, not commodities — Beyond Impact’s investment framework

Murakami: Could you walk us through Beyond Impact’s current investment structure and the specific domains you are investing in?

Sagar: The Beyond Group currently operates multiple investment vehicles. On the ETF side, Beyond Investing manages a fund that has grown to approximately USD 133 million in AUM. On the venture side, Beyond Impact operates as a dedicated impact VC with three active vehicles. Combined AUM across ETFs and VC funds exceeds USD 160 million.

As discussed in Part 1, our investment philosophy is organized around three axes: kinder, cleaner, and healthier. Within that framework, the largest investment domain is what we call Advanced Nutrition — a concept that is both broader and more precise than the commonly used term “food tech.” Rather than focusing on finished food products, we focus on the underlying ingredients and production processes. This includes alternative proteins［3］, alternative lipids, and advanced bio-derived molecules used in flavors, fragrances, and colorants. On the technology side, we cover precision fermentation［4］, cellular agriculture ［5］, molecular farming ［6］, and fungi- and mycelium-based platforms — across a wide range of verticals. We actively seek cross-sector technologies that are not locked into a single application but can be deployed across food, materials, and pharmaceuticals.

The second domain is biomaterials［7］: biodegradable or bio-based alternatives to petroleum-derived and animal-derived inputs — next-generation materials capable of replacing plastics, polyurethane, and leather. The third is the intersection of Advanced Nutrition with healthcare and beauty. Across these domains, Beyond Impact has invested in close to 30 companies.

Murakami: What criteria define an investable company for Beyond Impact?

Sagar: Our investment criteria are consistent: high value-add and strong margin potential, global scalability, and a defensible technical moat that competitors cannot easily replicate. We do not invest in commodity-priced products — because that is precisely where the tension between impact and economic return tends to emerge. For impact to be meaningful and durable, commercial viability and impact potential must coexist.

Take the case of replacing conventional animal protein with alternative proteins at scale — the impact would be enormous. But at current price points, displacing conventional protein commercially at that scale is not yet viable. That is why we focus on companies that may appear limited in initial market size and impact, but carry the potential for exponential impact over time. As scale and production volume grow, unit costs fall significantly — eventually making it possible to displace high-impact, conventional alternatives. That scaling logic underpins our investment thesis.

Beyond that, we place particular emphasis on the way nature itself operates through multi-purpose circular systems. A single technology platform — precision fermentation or cellular agriculture, for example — can produce proteins for food applications and raw materials for pharmaceuticals and cosmetics simultaneously. Not being locked into a single industry, entering through the most commercially viable route first, and expanding from there in a staged sequence: that is the approach we believe accelerates both impact and economic return.

Murakami: A step-by-step path to the core market and that logic flows directly into BFF’s investment thesis.

Sagar: Exactly. BFF builds on the investment expertise Beyond Impact has developed across biotech, biomaterials, and advanced nutrition — and adds the ocean as the defining axis. At the core are solutions that contribute in some way to ocean restoration, or that leverage marine resources such as microalgae and seaweed to transform existing industries. “Direct impact” means the technology or product directly contributes to the conservation of marine ecosystems. “Indirect impact” means transforming land-based food and materials systems in ways that reduce pressure on the ocean. Holding both of these lenses simultaneously is what makes BFF distinctive.

Could you summarize BFF’s core investment themes?

Murakami: Three themes: blue food［8］, biotechnology, and B2B solutions within ocean-related innovation.

Sagar: More specifically saying, we focus on deep biotech companies, ventures operating across the blue bioeconomy, and in some cases non-biotech domains such as materials science. We actively look for cross-sector technologies that can be deployed across multiple verticals — precision fermentation, cellular agriculture, molecular farming, fungi- and mycelium-based platforms. Opportunities that do not fit that lens are not within scope.

In terms of what we are aiming for across both impact and financial return: BFF should deliver returns fully competitive with mainstream ventures. If that is achieved, the fund attracts further capital and establishes a clear market position in this space. The ambition is to build on BFF with BFF 2 and BFF 3 — expanding the scale of impact with each successive vehicle.

Designing exits — delivering returns without diluting impact

Murakami: What exit pathways are you envisioning — both for the existing funds and for BFF?

Sagar: In the near term, M&A exits represent the most significant opportunity. Globally, large corporations are accelerating the acquisition of innovative startups, and this is likely to be the most common exit pathway. At the same time, some companies will emerge as category leaders — combining proprietary technology, brand strength, and market scale — and will pursue independent growth through IPO.

The risk we are always conscious of is impact dilution［9］ — the erosion of a company’s original social and environmental mission through an ill-suited M&A transaction. That is why we are extremely deliberate about identifying acquirers who will sustain and scale the impact, and about structuring exit terms that provide protective conditions post-sale. In the early phase of the fund, M&A exits offer an attractive combination: strong return potential alongside genuine room to protect impact by design.

Murakami: Whether impact persists post-exit is a critical question for BFF as well. How we ensure alignment of values with acquirers, and how we carry impact covenants through a transaction, are areas we want to continue developing together.

From extraction to regeneration — BFF’s vision for the New Blue Economy

Sagar: Murakami, from an impact perspective, what do you want BFF to ultimately achieve?

Murakami: Stepping back and looking at both impact and risk at a systems level: approximately 26% of global greenhouse gas emissions originate from the food sector, with around 14% attributable to animal protein production specifically［10］. Shifting from conventional protein production toward lower-impact, advanced production methods has the potential to dramatically reduce the food industry’s emissions footprint. Furthermore, approximately 78% of eutrophication in the world’s ocean and freshwater systems is driven by agriculture — land-based protein production is directly degrading marine environments through nutrient runoff. Advancing alternative and sustainable solutions is not optional; it is necessary.

Sagar: One theme we think about deeply is biodiversity conservation. Many species are being pushed toward extinction by the continuous extraction of natural resources. If BFF can quantify its contribution to biodiversity outcomes, that would represent extraordinary value. Fish oil is a compelling example. The DHA and omega-3s consumed globally as supplements are currently sourced predominantly from wild-caught fish, placing significant pressure on fishery stocks. If emerging technologies can provide viable alternatives, the opportunity to disrupt this entire industry — shifting it from extraction to regeneration — is substantial.

Murakami: The “New Blue Economy”［11］is precisely that vision. Moving away from an extractive ocean economy — one premised on taking from the ocean and imposing burdens on it — and toward a regenerative blue economy. As marine ecosystems recover and become richer, fish stocks rebound, and fishers can sustain higher yields over time. What emerges, over time, is a healthier and more balanced relationship between human society and the natural world. That maps directly onto UMITO Partners’ purpose of “harmonizing sustainable ties with the ocean”.

Three strengths of Japan and the global ecosystem connecting Europe and Asia

How do you see the Japanese market? And what is BFF’s intended global role?

Sagar: Japan sits at the intersection of significant opportunity and real structural challenge. Japan is often described as a country resistant to change — but from my own experience, there is an important dimension that tends to go unrecognized.

To start with, Japan is one of the very few developed markets genuinely trying to build sustainable finance from within. In most developed economies, impact capital has historically flowed outward to emerging markets. Japan is different. The question of how Japan itself transforms is being asked seriously. That is a shift worth paying attention to.

The second opportunity is Japan’s industrial base. In fact, Japan’s conglomerates are highly active in their search for innovation. The food manufacturing sector also has an exceptionally sophisticated and mature industrial structure. If emerging innovations can be effectively connected to that existing base, the upside is significant.

The third — and this is something I came to understand deeply through our work with UMITO Partners — Japan holds an extraordinary depth of accumulated knowledge about the ocean. That knowledge does not reside only in universities and research institutions. It lives in the fishing communities and coastal populations who have spent generations working with the ocean — understanding fish behavior, the characteristics of fishing grounds, the seasonal rhythms of the sea. Practical wisdom built through decades of lived experience. If that cultural and experiential knowledge could be more fully unlocked, it could give rise to entirely new forms of ocean innovation.

Murakami: At the same time — as I discussed with Kumo-san of SIIF in our earlier conversation — there are structural barriers that make it difficult for Japanese ocean startups to scale. That is precisely why BFF will function as a hub by supporting Japanese startups in expanding globally, while also attracting leading international companies into Japan.

Sagar: The mechanism for achieving that is reconnecting East and West. The dominant model has historically been unidirectional trade — Norwegian salmon exported to Japan, for example. What we want to see evolve is a bidirectional flow of ideas, technologies, and resources moving fluidly in both directions. A Swedish microalgae-derived supplement reaching Japan; a Japanese seaweed innovation expanding into European markets. What we are building is a global ecosystem where ocean innovators can converge crossing cultures, markets, and technological frontiers. That will not happen in a single step. It is a staged process. But by forming that hub, we see the possibility of fundamentally reshaping the future of ocean sustainability.

Murakami: The scale of impact available across the island nations and coastal countries of the Asia-Pacific is unlike anywhere else in the world. These are regions of acute and urgent need. BFF will prioritize them accordingly. Connecting the best ocean innovation across borders, generating new opportunities and sustainable solutions — that is what we see as BFF’s mission.

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