Dialogues With Sagar & Shunji — Part 2

In Part 2, Sagar Tandon (Beyond Impact) and Shunji Murakami (UMITO Partners) go deeper into the specific technologies and investment themes Blue Frontier Fund (BFF) is targeting, the fund's exit strategy, the opportunity in the Japanese market, and the concrete vision behind the 'New Blue Economy.' Originally published by UMITO Partners (text by Eri Ishida).

Six portfolio companies had turned blue

Sagar explains that the blue economy was not originally part of Beyond Impact's investment strategy. But stepping back to look at the portfolio, the team realised six companies were already operating in the blue bioeconomy — working with microalgae, cyanobacteria and marine bacteria, plant-based or cultivated seafood, and bio-based ingredients derived from seaweed and microalgae. The conclusion: blue cannot exist without green, and green cannot exist without blue. Terrestrial life, marine life, and the global climate system are deeply interconnected.

Compared with forests, terrestrial biodiversity, and decarbonisation, the ocean is dramatically underrepresented in climate investment conversations. Plant-based meat alternatives had already attracted significant commercial investment; plant-based or cultivated seafood had received a fraction. The technical barrier is higher — cultivating complex marine organisms is scientifically far more challenging than cultivating bovine cells — but Sagar sees that difficulty as the opportunity. Microalgae and seaweed remain resources of extraordinary versatility and sustainability whose potential is largely untapped at commercial scale.

Solutions, not commodities — Beyond Impact's investment framework

The Beyond Group operates multiple investment vehicles. On the ETF side, Beyond Investing 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.

Within the kinder/cleaner/healthier framework, the largest investment domain is Advanced Nutrition — a concept broader and more precise than 'food tech.' The focus is on underlying ingredients and production processes: alternative proteins, alternative lipids, and advanced bio-derived molecules used in flavours, fragrances, and colorants. On the technology side, the team covers precision fermentation, cellular agriculture, molecular farming, and fungi- and mycelium-based platforms — actively seeking 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: biodegradable or bio-based alternatives to petroleum- and animal-derived inputs, including next-generation replacements for 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.

Investment criteria are consistent: high value-add and strong margin potential, global scalability, and a defensible technical moat. The team does not invest in commodity-priced products — precisely where tension between impact and economic return tends to emerge. The focus is on companies that may appear limited in initial market size but carry the potential for exponential impact over time, as scale and volume drive unit costs down enough to displace conventional, high-impact alternatives. Particular emphasis is placed on multi-purpose, circular platforms: a single technology such as precision fermentation can produce proteins for food applications and raw materials for pharmaceuticals and cosmetics simultaneously.

BFF's investment thesis

BFF builds on Beyond Impact's expertise across biotech, biomaterials, and advanced nutrition — and adds the ocean as the defining axis. At the core are solutions that contribute to ocean restoration, or that leverage marine resources such as microalgae and seaweed to transform existing industries. 'Direct impact' means the technology 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 lenses simultaneously is what makes BFF distinctive.

BFF's three core themes are blue food, biotechnology, and B2B solutions within ocean-related innovation. The focus is on deep biotech companies, ventures across the blue bioeconomy, and in some cases adjacent non-biotech domains such as materials science. The ambition is for BFF to deliver returns fully competitive with mainstream ventures — and, on that basis, to build BFF 2 and BFF 3, expanding the scale of impact with each successive vehicle.

Designing exits — delivering returns without diluting impact

In the near term, M&A exits represent the most significant opportunity, as large corporations accelerate acquisitions of innovative startups. Some companies will also emerge as category leaders and pursue independent growth through IPO. The risk both partners are always conscious of is 'impact dilution' — the erosion of a company's original mission through an ill-suited transaction. Beyond Impact is therefore extremely deliberate about identifying acquirers who will sustain and scale the impact, and about structuring exit terms with protective post-sale conditions. Murakami adds that how impact persists post-exit, and how impact covenants carry through a transaction, are areas both teams want to continue developing together.

From extraction to regeneration — the New Blue Economy

Murakami highlights the systems-level context: approximately 26% of global greenhouse gas emissions come from the food sector, with around 14% attributable to animal protein production specifically. Approximately 78% of eutrophication in the world's ocean and freshwater systems is driven by agriculture — meaning land-based protein production is directly degrading marine environments through nutrient runoff. Advancing alternative and sustainable solutions is not optional; it is necessary.

Sagar emphasises biodiversity. Many species are being pushed toward extinction by 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: DHA and omega-3s consumed globally as supplements are predominantly sourced from wild-caught fish, placing significant pressure on stocks. Viable alternatives could shift this entire industry from extraction to regeneration.

As marine ecosystems recover and grow richer, fish stocks rebound and fishers can sustain higher yields over time. What emerges is a healthier, more balanced relationship between human society and the natural world — mapping directly onto UMITO Partners' purpose of harmonising sustainable ties with the ocean.

Three strengths of Japan, and a bridge between Europe and Asia

Sagar sees Japan at the intersection of significant opportunity and real structural challenge. First, 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, but Japan is asking how it itself transforms. Second, Japanese conglomerates are highly active in their search for innovation, and the food manufacturing sector has an exceptionally sophisticated industrial base; connecting emerging innovations into that base creates significant upside. Third, Japan holds an extraordinary depth of accumulated ocean knowledge — much of it living in fishing and coastal communities who have spent generations understanding fish behaviour, fishing grounds, and the seasonal rhythms of the sea.

Murakami notes the structural barriers that make it hard for Japanese ocean startups to scale, and frames BFF as a hub: supporting Japanese startups in expanding globally while also attracting leading international companies into Japan. Sagar describes the mechanism as reconnecting East and West — moving beyond unidirectional trade (such as Norwegian salmon exported to Japan) toward a bidirectional flow of ideas, technologies, and resources. A Swedish microalgae supplement reaching Japan; a Japanese seaweed innovation expanding into Europe. The aim is a global ecosystem where ocean innovators converge across cultures, markets, and technological frontiers.

Murakami closes on the scale of impact available across the island nations and coastal countries of the Asia-Pacific — regions of acute and urgent need that BFF will prioritise accordingly. Connecting the best ocean innovation across borders, generating new opportunities and sustainable solutions: that is the mission both teams see for BFF.

Read the full original interview (text by Eri Ishida) on UMITO Partners: https://umitopartners.com/en/stories/restoring-the-ocean-while-growing-industry-part-2/