Shrikumar Suryanarayan, co-founder and MD of Sea6 Energy Pvt. Ltd.
Image: Selvaprakash Lakshmanan for Forbes India
India has a high dependence on crude oil—it’s the third-highest importer in the world after the US and China. According to a July 25 report in the Economic Times, India imported $31.4 billion worth of crude oil in the April-June quarter, about 60.1 million metric tonnes in volume.
There is no easy alternative to the versatile crude oil, which powers our industry and energy needs ranging from transportation to textile, but which also releases a huge amount of carbon dioxide that traps heat and contributes to global warming.
A Bengaluru-based startup launched by a biotechnology research veteran from Biocon and three engineering graduates from the Indian Institute of Technology (IIT)-Madras is contributing to the solution by farming the ocean. Sea6 Energy is developing a large-scale sustainable alternative feedstock of seaweed, which “can potentially replace everything that we do today with crude oil”, says Shrikumar Suryanarayan, co-founder and chairman.
In the past 13 years since the startup was founded, it has been working on two broad areas: First, large-scale seaweed production by developing automation, and second, converting this seaweed into useful products that have applications across various sectors.
Growing seaweed—which absorbs carbon dioxide as it grows, transforming it into biomass—is traditionally a labour-intensive process restricted to shallow waters, which makes it cost-ineffective. Sea6 has been inventing and scaling up machinery to counter these issues. It has a patent on a seaweed farming system, Suryanarayan says, which includes a tractor that automates the process of seaweed seeding and harvesting. There are also large-scale girds that float on the ocean surface, which can withstand rough waves on which seaweed can be grown.
The first product made from seaweed that they have commercialised is a proprietary bio-stimulant, an extract, when sprayed in a small amount on a crop—like rice, maize, sugarcane, what have you—can drive the yield up by 10 to 30 percent depending on the crop that’s grown, the inputs (fertilisers, irrigation) etc provided and the condition in which it is grown. “This is not a fertiliser by itself, but it improves the efficiency of how plants capture sunlight and use nutrients,” says Suryanarayan. “This means, effectively, we have found a way to produce more food from the same land mass and, therefore, improve our food security.”
Sea6 has a global patent on this product, which is exported to the US, Europe, Latin America, Japan and other countries in Southeast Asia. These bio-stimulants are manufactured both in India and Indonesia, though the bulk of the seaweed farming is done in the latter where Sea6 has a fully owned subsidiary because of the advanced maritime zoning and leasing regulations.
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Sea6 is on track to earn about $10 million this financial year largely on the back of the bio-stimulant, says Suryanarayan. He adds that they are working on how to make crude oil or fuel from seaweed, and have also published a scientific paper with IIT-Madras last year detailing how this could be possible. The startup, according to Tracxn, has raised a total funding of $39.4 million from investors, including Tata Capital, BASF, Aqua Spark and Silverstrand, apart from a handful of angel investors, including Biocon CMD Kiran Mazumdar-Shaw. The Series B fundraise, which got in around $18.5 million, came in July 2022, as per Tracxn.
The startup is yet to turn a profit, Suryanarayan says, because “expense on R&D is high” and the registration pathway required for commercialisation is long in different countries. “But once you get registration, sales are very rapid,” he says. “The agricultural bio-stimulants are inherently profitable, and as the volumes build up, we expect to gain profitability in the next year or year and a half.”
As they also scale up their farm technology, they have started doing research on how seaweed can be converted to biodegradable plastic. “Next year, we will be in a position to start rolling out some of these products, and we are positioning our next fundraising round, which is Series C, as a growth round,” says Suryanarayan.
Vineet Chadha, partner, Tata Capital Innovations Fund, was one of the first to invest in Sea6 in 2015 and has been invested for the past eight years. According to him, the company has been consistently progressing and developing interesting products with seaweed, like, he says, water-soluble detergent pods, whose outer layer also dissolves as the clothes get washed.
Chadha believes that the beauty of Sea6 is the founding team’s ability to innovate using simple, intuitive tools and technology and come up with large use cases and commercial applications. “They never complicate or over-engineer things. Their products, including the bio-stimulant, are testament to that. These guys think big, but simplistically. They have their science and their thought process very clear.”
As an investor, the exit has taken longer than what he expected, partly because of Covid-19, Chadha says, but he is happy that they’ve been getting partial exits at regular intervals, one in 2020 and another in 2022. “The team is committed to give, and has been giving us liquidity, which is a good thing,” he says.