Seaweed Extract Supplier Macro Oceans Raises $7.5M In Seed Funding, Acquires Everything Seaweed For Capacity And Expertise

As the beauty industry looks to reduce its dependence on petrochemicals, Macro Oceans is building its capacity to offer seaweed-powered ingredients as alternatives by completing a $7.5 million seed funding round and acquiring Everything Seaweed, a seaweed processing and biomaterial supplier.

Established in 2020, Macro Oceans has secured $2.5 million in seed extension funding to finish the round. Refactor Capital, a venture capital firm focused on environmental and health technologies, led the round, with participation from McKinley Alaska Private Investment, Knollwood Investment Advisory and Schox Venture Capital.

The investors are betting the nascent kelp industry in the United States, which is far behind East and Southeast Asian countries in the seaweed trade, will flourish if the expenses of kelp cultivation, extraction and processing decline. They join the proliferating ranks of backers of biotechnology outfits producing ingredients for the beauty industry, most notably L’Oréal, a highly active player pouring money into companies like Geno, Abolis Biotechnologies and Debut, that respond to conscious consumers’ demand for sustainability and present solutions for climate change that’s likely to exacerbate the unpredictability and cost of the industry’s ingredient sourcing.

Macro Oceans has a single ingredient on the market today called Big Kelp Hydration in products from beauty brands such as Captain Blankenship and SeaSoaked Skin—and more ingredients and products with them, including from Umanos and Project Reef, on the horizon. It commissioned MS Clinical Research to conduct a study on Big Kelp Hydration that discovered it yielded an 80% increase in hydration immediately and a 26% increase in skin barrier improvement immediately.

“Seaweed is this bountiful resource. It doesn’t require any fertilizers or pesticides. It doesn’t need fresh water. It doesn’t compete with land-based crops. We still need to feed a lot of people,” says Matthew Perkins, founder and CEO of Macro Oceans and former British diplomat who previously worked at agriculture startups. “We thought there was an opportunity to take this really scalable, interesting, sustainable resource and transform it into materials, and we began in beauty because beauty is a wonderful place that needs high-performance materials that are sustainable.”

James Dillard, chief business officer at Macro Oceans and former product manager at Stripe and YouTube, says, “We are looking at this as a catalyst for industry-wide and cross-industry change. Think about it this way. The Tesla Roadster was not the first electric car, but what made it special was the plan to say we’re going to start at this high-end super expensive niche product, but we’re going to expand the technology out to lots of different places where it can be applicable and where it’s a better fit for higher impact alternatives. That’s what we’re trying to do.”

“We are looking at this as a catalyst for industry-wide and cross-industry change.”

Macro Oceans buys seaweed from two farmers in Alaska who cultivate it on floating lines in the sea beginning in the fall and harvest it in May or June. Once it’s harvested, polysaccharides or carbohydrates prized in skincare for soothing and moisturizing the skin are extracted and Macro Oceans purifies them for commercial purposes. The purified ingredient is then dispersed to contract manufacturers for beauty formulations. Pricing for Big Kelp Hydration starts at $169 per kilogram.

Along with its hydration benefits, Dillard points out beauty brands are drawn to Big Kelp Hydration’s traceability. Next year, the company plans to do a life cycle analysis to provide brands broad insights into its environmental impacts or lack thereof. Dillard says, “We know every batch of seaweed, where it’s coming from, when it was harvested, which farmer. We trace it through our factory.”

Sacramento-based Macro Oceans’ acquisition of Portland, Maine-based Everything Seaweed will ramp up its seaweed refinery ability, put Everything Seaweed’s products in its suite of products and add Colin Hepburn, founder of Everything Seaweed and a renowned seaweed industry expert with over 30 years of experience processing seaweed, to its team. Hepburn is becoming CTO of Macro Oceans. Jessica Chalmers, co-founder and CEO of Everything Seaweed, is becoming a member of Macro Oceans’ team, too. Terms of the deal between Everything Seaweed and Macro Oceans weren’t disclosed.

Everything Seaweed’s products are coatings for food packaging free of per- and polyfluoroalkyl substances (PFAS), better known as the “forever chemicals” linked to higher risk of certain conditions like liver damage and testicular cancer, and polyacrylate texturizers or thickening agents for skincare. Macro Oceans is considering food and packaging for future expansion. Other biotech companies serving the beauty industry have launched their own beauty brands, but Macro Oceans has decided against it because launching a beauty brand requires a skill set it doesn’t have.

Asked about Macro Oceans’ path to profitability, Perkins says, “We’re definitely on that path. We have positive unit economics.” The company declined to specify its sales and growth rate.

Feature photo credit: Seagrove Kelp