Seaweed Startups: Fresh Off the Boat

Seaweed Startups: Fresh Off the Boat

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Witnessing the sunrise on a beach, with your feet buried in the sand kissing the waves of the sea, you will find the entire mood and ambience a picture-perfect one. But the water bodies have more to offer than just aesthetic vacation pictures. A few kilometers into the sea rests a zone with a depth of 50 meters or less, making it the perfect environment to cultivate macroalgae, popularly known as seaweed.

A SUSTAINABLE INGREDIENT AND ECO-FRIENDLY ALTERNATIVE TO PLASTIC

While seaweed is a broad term used for diverse marine species and algae found in lakes, ponds, seas, and oceans, the biggest potential lies in its extracts, which can give us a sustainable and eco-friendly alternative to one of the biggest threats to humankind- plastic. The latter is an indispensable material in almost every sector, including textiles, building and construction, consumer products, transportation, electrical and electronics and industrial machinery.

“Seaweed’s versatility makes it a promising alternative to traditional plastic in a wide range of applications. The food boxes, for instance, that you get your burger in have a very thin line of coating that makes the paper box oil resistant. This is the hidden plastic no one talks about – the current coatings are usually infused with a lot of synthetics and PFAs, which is extremely harmful for us and the environment,” says Neha Jain, CEO and founder, Zerocircle.

Seaweed is also renowned for its ability to mitigate climate change by isolating carbon dioxide from the atmosphere. Additionally, it plays a vital role in agriculture as a soil conditioner, soil fertilizer, and pesticide. It’s a good source of vitamins, minerals and fibre, thus making a category of seaweed edible in nature. The cosmetics and beauty industry holds macroalgae in high regard and it is also a great potential alternative to crude oil.

GLOBAL AND INDIAN MARKET

While seaweed has multiple use cases, its cultivation in the country is abysmally low. At present, China, Indonesia, and the Philippines are counted as some of the biggest producers of seaweed. In July 2022, the Central Marine Fisheries Research Institute reported that India has the potential to produce about 9.7 million tonnes of seaweed annually against a trivial number of 34,000 tonnes in 2021. The biggest factor behind the potential is India’s 7,516.6 km long coastline. The good news is seaweed is found in abundance in the states of Goa, Kerala, Tamil Nadu, Andhra Pradesh and around Lakshadweep and Andaman & Nicobar Islands.

PLAYERS

Despite the big opportunity, little over a dozen Indian startups are working in this space. Abhiram Seth established AquAgri Processing Pvt Ltd in 2008 with the intention of competing with other Asian countries for seaweed cultivation coupled with employment generation for coastal communities, especially local women. “Aquagri started its operations with the vision of creating livelihoods for the coastal communities and sustained the business by exporting the raw dry seaweed to international processors for carrageenan production. Once critical biomass scale was achieved, it led Aquagri to set up a local carrageenan manufacturing facility,” the founder and managing director of AquAgri shared.

Over time, AquAgri’s innovative process to optimize water usage led to the development of biostimulant applications for agriculture. The Sethi-founded startup offers its products in the field of food solutions, plant nutrition, animal nutrition, and seaweed cultivation. It has its manufacturing facility located in Manamaduari, Tamil Nadu.

In 2020, Jain wanted to make her home a plastic-free one, but it went in vain. After thorough research and understanding, she realized that the daily products one uses in daily life contribute to the planet’s pollution, “Pollution, climate crises and every problem that comes with plastic is a ‘now’ problem, there is no future if we don’t try to fix it today.” And that is how Zerocircle was born.

The startup was recently recognized by the Tom Ford Plastic Innovation Prize for its initiative. It is a B2B brand helping businesses and manufacturers to adopt carbonefficient materials and works with players in the fashion, e-commerce and F&B industries. “Our seaweed-based coatings are not only a viable alternative to the existing ones, but they are also extremely high performing and cost-effective,” shares Jain. The startup sources seaweed from farming communities in Gujarat, Maharashtra and Tamil Nadu.

The 2010 biofuel company Sea6 Energy is one of the key players in the Indian space. It was established to address India’s crude oil dependence. “We were looking out for solutions to help address India’s dependence on crude oil and be self-sufficient when we realized that small-scale solutions wouldn’t work. We would need to convert all of India’s agricultural output into crude oil for us to stop importing crude oil. Couple that with a rising population and declining agricultural land – we knew that the only way out was to be able to make use of the ocean around us,” shared Nelson Vadassery, co-founder and chief technology officer, Sea6 Energy, earlier with Entrepreneur India.

While it also operates in the biostimulant, animal feed, organic food ingredients, bioplastic, and biofuels, it is heavily working and investing in mechanized ocean farming. “We are developing a whole range of product lines based on seaweed-derived plastics, which will be a major trigger of growth,” added Vadassery.

GROWING STARTUP ECOSYSTEM HAMPERING AQUATIC LIVELIHOOD AND COMMUNITIES?

“We closely work with local communities to ensure that the farming practices are sustainable to avoid overfishing and damage to the marine environment. These farms ensure that their farming practices aren’t interfering with the natural ecosystem. We only use green and clean chemistry and energy-efficient processing methods to optimize resources like water and electricity,” shares Jain.

THE FUNDING DEARTH

Despite the opportunity the segment shows, only a handful of startups are funded. Though the cost of manually setting up seaweed is relatively low, with profits being high, it is a time-consuming and labor-intensive process. Additionally, traditional cultivation methods using ropes underwater limits large-scale production and conflict with fish landing centres and commercial fishing activities pose an obstacle. “We feel there are certainly more teams out there working on utilizing seaweed for various use cases, but most of these teams will be in the research phase and might not be looking for funding or commercializing the product at this stage. Cultivating seaweed is not similar to agriculture or aquaculture and is a new and unexplored landscape in India. There is more investment needed for growing seaweed since farming and processing requires specialized infrastructure. Since Seaweed-based innovation is relatively new, many investors also may not be aware of the potential opportunities,” shared Dinesh Pai, Investments, Rainmatter Foundation. RMF invested in Zerocircle back in 2021.

Seaweed farmers are moving away from the traditional methods of cultivating seaweed with the use of nets and towards a method utilizing ropes and long lines as the latter tend to damage marine life, while long lines give way to a greater yield of seaweed per sq mt. Automated processes can increase the production process while reducing crop damage.

THE FUTURE

The global seaweed market is expected to grow at a CAGR of 7 per cent from 2017 to 2025. The Indian government is planning and investing in the segment accordingly to aim for a seaweed production worth 1 million tonnes annually by 2025. The government has also implemented the Pradhan Mantri Matsya Sampada Yojana in all states and territories from FY 2020- 21 to FY 2024-25. Additionally, its Blue Revolution scheme is expected to give the seaweed space a push. Department of Fisheries’ ‘100 Super Success Stories from Indian Fisheries’ is a collection of individuals and initiatives which have grown from the PMMSY, where five success stories pertained to seaweed.

So, where can we expect the seaweed industry to be in the next 5-10 years? “If the industry is to succeed in the low-cost mass production of marine algae, then possibilities of biofuels can also be unlocked, which can herald a new era for sustainable energy sources. The future is bright, but a conducive environment to support growth and for channelizing the investment is critical for success,” concluded Seth.

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