Orrick’s Zac Padgett sat down with Jeff Stoike, co-founder and president of Blue Action, to explore energy innovation and how Blue Action is supporting the next wave of tech-driven solutions. Learn about:
- Blue Action’s three-pronged approach, including nonprofit work, commercial deployment and early-stage venture investment
- Disruptive tech on the horizon, like passive air lubrication systems for the maritime industry
- Tips for founders in hard tech, from navigating investor relationships to a fast-changing regulatory environment
Jeff: We've got a company that is effectively bubble-wrapping cargo ships, right? Air lubrication system is the technical term, but we like bubble-wrapping ships.
Zac: Zac Padgett with Orrick. I'm here with Jeff Stoike, co-founder and president of Blue Action. Why don't you tell us a little bit about what Blue Action is up to.
Jeff: Well, thanks for having me, Zac. I appreciate the opportunity to share a little bit about our work and how it interfaces with this exciting moment here in town at South By.
Blue Action is the umbrella organization that houses our non-profit work that we do capacity building around climate resilience and mitigation. We also have a for-profit arm under Blue Action that does growth stage commercial deployment facilitation. And we have our early- stage venture platform, Blue Action Accelerator, that we do with Founders Factory.
Zac: So three different buckets taking up your time?
Jeff: Three main tracks, yeah. Three-ring circus.
Zac: Got it. What are some examples of some of the partners or companies you work with in some of those buckets?
Jeff: Yeah, well, our main partner that we have to mention for many reasons is our lead investor, which is Lukas Walton and Builders Vision. We're doing coral reef restoration, mangrove restoration, trying to rehabilitate the Queen Conch in the Caribbean and doing, most importantly, doing environmental education and high-skill workforce training and development around those restoration economies and industries.
And then, as I mentioned, we've got this exciting joint venture with Founders Factory out of London and New York, where we are working with pre-seed and seed stage companies looking at climate solutions, whether it's on the mitigation or the adaptation side. And we've been running that joint venture for about a year and a half, made 11 investments so far, we've looked at over 400 companies, and working across the gamut, maritime decarbonization...
We're actually looking at – we've invested in – a technology, Armada, that has a passive air lubrication system. So rather than having a compressor, which requires energy and takes up space on the ship, they've got a passive system to blow bubbles around the hull of these massive cargo ships, reducing noise pollution, reducing the fouling process where sort of the hulls of the ship get dirty and create more drag, and that then translates into greater fuel efficiency.
Zac: Right now in this current moment, you know, I'm talking to a lot of founders who are trying to determine what the most viable path is to developing a startup and a lot of it comes down to where can they attract that initial set of investment. Maybe you can talk a little bit about what, you know, new founders right now should be thinking about when trying to attract early investment in hard tech.
Jeff: Yeah. We've certainly looked across the gamut of those opportunities. And like it or not, we've been leaning more towards this hard tech, deep tech, CapEx intensive infrastructure oriented innovation because we think it's so critical and it's a sort of Gordian knot that needs to be resolved. And the key there, we've realized, is you need patient capital. But you also need these testing grounds. You need places where these companies can deploy these technologies, try to test them out, prove concept, and get that feedback to then go on to maybe more conventional investors.
Zac: Yeah, and we've been trying to help founders understand the capital stack that's really needed to do hard tech well. And it is kind of, you need a village to raise this type of company approach where you'll have an early partner, hopefully someone with the philanthropic or impact mission. Then you need to find a financial sponsor and likely some kind of corporate venture capital, a partner that's interested in the tech because it ties into their broader ecosystem. And then navigating the relationships between those multiple investors. And then as you grow, debt financing.
Jeff: Absolutely. We're not working as much in the debt financing component of that. But that's absolutely critical for Series A beyond. But as you mentioned, having these CVC partners, absolutely critical. They know the industry as well as anybody else. They've got the balance sheet to maybe take some risks on emerging technologies. One though that we specialize in really is the regulatory piece. And so, you can have all the money in the world, but if you're waiting years to get cleared on the permitting to deploy your technologies, you're missing the game, not just the ball, but the game.
Zac: Great, well, thanks so much, Jeff, for coming in.
Jeff: I appreciate it. Yeah, thank you.
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