Coast 4C

Shallow coastal waters are where the vast majority of ocean biodiversity and ecosystem services are found. It is also where nature collides with the greatest human pressures. Whilst global interests have increasingly shifted to the high seas where the big numbers in terms of km2 can be more easily achieved, our job in shallow waters is far from complete and yet more urgent than ever. Three-quarters of the world's population live within 60km of the coast. 90% of fisheries yields come from waters <200m deep. Coastal habitats provide critical ecosystem services such as water filtration, storm protection and carbon sequestration. And millions of people's livelihoods and food security depend on these waters, including many of the most vulnerable people in the world. Yet they are still being eroded at an alarming rate. Whilst there are thousands of marine protected areas, they are generally too small and ineffective because of a high dependency on grants and tourism that delivers limited benefit to small-scale fishers. Meanwhile, the explosion in demand for seaweed as a sustainable alternative for food, feed, fertilisers and polymers, supported by a huge number of start-ups and companies harnessing new seaweed-processing technologies, is facing a severe bottleneck in supply. Seaweed is a smallholder crop and provides a lifeline for millions of vulnerable people, particularly women, in coastal fishing communities. Whilst there are more seaweed farmers now than ever before, outdated farming practices, climate change and poor access to quality seedstock have driven high levels of seaweed diseases and declining quality. Faced with high levels of risk and inadequate support services, farmers have increasingly adopted unsustainable practices and returned to fishing, and seaweed quality as well as quantity has declined. In response, an increasing number of brands are adopting sustainability commitments that they are struggling to meet within their supply chains. Coast 4C directly addresses these challenges of quality, responsible seaweed at scale, whilst linking it directly to increased protection of coastal waters, and improving the livelihood outcomes for millions of the most vulnerable coastal people, creating a win for each of the 4Cs of Communities, Conservation, Commerce and Climate.

Through improved gender-equitable livelihood opportunities in seaweed aquaculture, Coast 4C empowers marginalised coastal communities to become good stewards of coastal resources, leveraging their unique local ecological knowledge and connection to the environment to help protect and restore coastal ecosystems and replenish fish populations. Leveraging a highly experienced local team with deep sectoral knowledge and networks, regenerative seaweed and fishing zones are integrated alongside mangrove, coral and seagrass protection zones and plastic reduction and recycling within locally managed protected marine areas in a hub-and-spoke model that increases protection of coastal ecosystems in targeted areas from less than 1% to 30%. We aggregate and partner with thousands of smallholder farmers in Southeast Asia, providing farm input packages with new technologies based on our own R&D and high quality seedlings, that enable farmers to triple yields whilst enhancing quality and climate resilience. Integration of these practices into the locally managed protected marine areas further helps to de-risk farming, making it a more attractive proposition for a larger number of people in coastal communities, and encouraging a shift away from destructive fishing activities. Coast 4C provides a guaranteed buy-back of sustainable protection at a premium price, ensuring communities that demonstrate good stewardship are rewarded. Coast 4C aggregates, further processes and sells this seaweed on to our growing list of global clients, providing a much sought-after supply of quality, responsible seaweed, in quantity, for responsible global brands. Coast 4C leverages cloud-based mobile technology, in-water sensors and data to provide traceability of product and impact, and increase seaweed yields and quality. Furthermore, we establish special purpose cooperatives, based on the globally proven self-help financial model (Village Savings and Loan Associations, VSLAs), as our social infrastructure to deliver farm input packages and services and to aggregate material at the local level. As well as increasing financial literacy and social capital within the community, this approach ensures that we have a strong focus on female empowerment (around 85% of VSLA members are female), and by building the capacity of VSLAs to act as local buying stations and the first stage of quality control and processing, we are able to increase the community share in the value chain, whilst creating an efficient model for scale.

Our target population are marginalised smallholder fishers and seaweed farmers living in marine biodiversity hotspots. Seaweed is a smallholder crop that depends heavily on the local ecological knowledge of fishing communities, and has provided a lifeline for millions of people in coastal communities in Southeast Asia who are on the front line of climate change, marine biodiversity loss, chemical and plastic pollution. Smallholder farmers in the Philippines and Indonesia produce more than 95% of the world's most cultivated seaweeds (eucheumatoids). It is a highly inclusive occupation and is particularly important opportunity for vulnerable groups, including women. However, smallholder farmers are massively underserved. Most investment into the sector has been made into new processing technologies and applications. The limited investments made into production have generally ignored the capacity of smallholder farmers, and instead focused on unproven production systems that mimic the trajectory of the green revolution. As a result, smallholder production systems have not changed in over 50 years, and a handful of strains have been vegetatively propagated for the same time period. These systems are no longer fit for purpose in the context of climate change, resulting in high levels of disease and declining performance and quality. At the same time, value chains are opaque and convoluted and farmers have little negotiating power. This all translates into higher levels of risk for farmers, who respond by minimising their investment into farming and reinvesting any surplus into fishing. As fish stocks decline, increasing numbers of people resort to unsustainable practices, some of which (such as poison fishing, blast fishing and illegal trawling) pose a direct risk to seaweed farming. Thus it becomes a negative cycle, which has resulted in the fisheries sector having the highest incidence of poverty (e.g. 30.6% in the Philippines). At Coast 4C we break this negative cycle by investing in smallholder farmers through farm input packages that combine high quality seed and planting materials, and improvements in on-farm and off-farm management practices that increases both the quantity (by reducing mortality) and the quality (by ensuring best practice is followed) of their crops. These packages are heavily grounded in behaviour change theory, recognising that farmers often know how they can improve farm outcomes but face barriers to implementing those changes. Thus, our approach focuses on identifying and removing those barriers and is easily customised to different contexts. To create efficiencies, we deliver farm input packages through our network of VSLAs, which increase access to financial services and create strong social capital, and utilise mobile cloud-based technologies. At the same time, we work with communities to integrate regenerative seaweed farming practices into larger and more effective community-based marine protected areas, which help to de-risk farming by enabling communities to exclude damaging practices. We offer a guaranteed offtake with premium price for those that meet our social and environmental criteria.  This combination results in a four-fold increase in crop value per farmer, and provides an incentive and the enabling conditions for communities to protect larger areas of their coastal waters.

The top-cos are headquartered in Australia, where co-founder & CEO, Dr Nick Hill, is based. Co-founder & COO, Amado "Madz" Blanco, is a Filipino from a coastal fishing community and based in the Philippines. Here we have our subsidiaries, and 19 of our team of 21 FTEs are based in the Philippines. A passion for nature led Nick to Mozambique as an ecologist in 2001, where he experienced the raw blue planet. Nick also witnessed deep inequalities and became increasingly jaded by the 'conservation business'; the perpetual cycle of grant-writing where time horizons didn't match ecological timeframes and removed the agency of coastal communities and their knowledge. This led Nick to Madz, who invited Nick to do his PhD research on seaweed and fishing livelihoods in the Philippines in 2007. Madz has a background in communications and agri-development, and at this time was the national director of a grass-roots Philippine NGO called Project Seahorse Foundation for Marine Conservation that was a pioneer in supporting and enabling communities to implement locally managed protected marine areas. Madz had been searching for a solution to reduce dependence on declining fishing stocks, and started to look into seaweed farming. However, Madz noticed that communities involved in seaweed farming did not appear to be any better off either socioeconomically or environmentally, and wanted Nick to look into the reasons for this. Nick conducted over 4,000 interviews, workshops and focus group discussions, and lived with fishers and seaweed farmers for over a year. Then, between 2012-2021, we incubated and co-developed with communities the concepts behind Coast 4C in an innovative charity-industry collaboration called Net-Works(TM). During this time we started to build a multidisciplinary team, who, importantly, are all from the coastal areas in the Philippines. We knew that we had the right solution when communities started co-investing their own hard-earned cash into their local conservation efforts, community demand surged, and we saw tangible conservation results and started to gain traction in the market. Subsequently, we launched Coast 4C and transitioned this team and our operations. Nick and Madz each have over 2 decades living and working in coastal communities. They are backed by a world class non-executive directors for both the for-profit (Natacha Lippens) and the non-profit (Professor Heather Koldewey, Alison Atherton, Mark Smith, Miriam Turner, Andrew Terry). Our CFO and General Counsel/Company Secretary are based in Australia with strong financial and corporate experience. Our 19-strong Philippine team are heavily integrated into the coastal communities that we serve, and have the diverse skill sets that we require, including skilled Community Organisers (e.g. Rosemarie Socobos, Hub Manager), behaviour change specialists (e.g. Frenz Garcia, Training and Standards Supervisor), industry experts (e.g. Ronald Simbajon, Commercial Manager and a board member of the Seaweed Industry Association of the Philippines) and aquaculture technicians/specialists (e.g. Noel Opina, Production Support Supervisor). Finally, we have strong local (e.g. University of the Philippines Marine Science Institute, and local government units and agencies), technical (Oceanfarmr, Arribada, Koltiva) and industrial (e.g. Unilever) partnerships and collaborations.

• Seaweed sales: We have built a supply chain of seaweed, with monthly sales of over 100 tonnes of raw dried seaweed (equivalent of about 800 tonnes of fresh seaweed). In the last quarter (Jan-Mar 2024) we had sales revenues of USD350k.
• Farm input packages: We have developed a farm input package that we have piloted with 263 farmers and have trained a further 400 farmers who have requested access to the package. Right now we are working more intensively with a smaller group of 60 farmers to refine the package and gather the data needed to inform the development and costing of a fair farm finance package for a third party to help us scale this approach more rapidly. The development of the farm inputs package and farm finance product is being supported by the TRANSFORM Initiative (led by Unilever, EY and UK FCDO) and the Ocean Risk & Resilience Action Alliance (ORRAA).
• Increased locally managed marine protected areas (co-branded with local communities as "iMPA" = improved marine protected area): we have established eight iMPAs that we co-manage with 10 communities and protect 5,766 ha of coastal waters. These have increased the size of marine protected areas in targeted bayscapes from <1% to 17%, and on average are 4,500% the national average size of marine protected areas.

• As we enter our growth stage, we need to build our capacity to scale fast and efficiently, whilst not losing sight of our mission. Access to the virtual support programme, including the tailored capacity workshops, leadership coaching, and opportunities to connect and network with peers and impact-minded leaders who have been through similar experiences will be invaluable to help build that capacity and prepare for scale.
• Credibility and exposure to support fundraising and partnership developments: Becoming a Solver will really help to bring some credibility and exposure to support our fundraising process (targeting a Series A raise in 18-24 months), as well as attract potential partners/clients and open new doors. Additional credibility and support would be provided should we be successful with the Prince Albert II of Monaco Foundation Ocean Innovation Prize, given the Foundation's key role of convening thought leads in the blue economy space. Few people or organisations have the capacity to evaluate the credibility of organisations like ours that work directly with smallholder producers through a holistic model, and becoming a Solver would be an invaluable validation of our impact and credibility. The sort of exposure and PR that this could bring is well beyond what we would be able to afford to pay for through more traditional routes.
• The financial prize itself! We are targeting the Prince Albert II of Monaco Foundation Ocean Innovation Prize, and the associated financial prize would give us the financial flexibility to make some key senior hires as we prepare for scale and a Series A fundraise, as well as enabling us to further scale our revenue, increasing our valuation in support of a Series A raise.

Our solution is innovative in integrating seaweed with larger and more effective community-based marine protected areas to drive restoration of habitats; in shifting smallholder farmers away from dependence on expensive informal credit markets to finance their operations - effectively making them investible; in building a farm input package grounded in behaviour change theory to both recognise the value of local ecological knowledge that smallholder farmers obtain (and encourage sharing between farmers) and help to overcome barriers to best practice, and; in the use of mobile technology to evaluate seaweed farm performance and evaluate and distinguish different risk profiles associated with different farmers and their practices.

Previously, MPAs have had limited opportunities for financial support beyond user fees paid by tourists. Under this model, MPAs provide a service for seaweed farmers to reduce risks, secure tenure, and provide infrastructure for post-harvest processes that increase the quality of their product. Their ability to attract a higher price for seaweed that has been grown within a well performing iMPA creates a further incentive for them to support the iMPA. Seaweed farmers become part of the enforcement infrastructure of the iMPA, and also contribute through small user fees to the community management body to ensure sustainability, and creates a new opportunity for financing the scale-up of MPAs more broadly. Additionally, designating sustainable seaweed farming zones ensures that we can maximise the potential positive impact of seaweeds on the ecosystem. Whilst seaweed has been recognised for their potential to have these effects, it is only when appropriate management is put in place that the results can be achieved.

To date, seaweed farmers have had to depend on expensive informal credit markets to finance their seaweed operations. The alternative are loans from micro-finance organisations (MFIs). However, MFI loans tend to be far too large for the seaweed farmers’ purposes, and MFIs have not provided the technical know-how and farm management support to help reduce risks. As a result, farmers that have taken MFI loans have often experienced severe hardship when their farm has failed to perform as expected and they have large loans to service. Creating a bespoke farm financing product for seaweed that is based on data and is linked to a farm inputs package and management service that reduces risk allows us to develop a much more suitable financial product for seaweed farmers. The use of the farm management app also allows us to get regular updates on the performance of the farm and identify where farmers need additional support to improve outcomes. We connect the farm finance with the VSLA set-up within the communities that strengthens the approach by building on the social capital that has already been created in the group.

- Evidence around the linkage between fishing and seaweed farming, and associated thresholds for shifting from fishing to seaweed farming etc:

• Hill NAO. 2011. Livelihood diversification for conservation: interactions between seaweed farming and fishing in Danajon Bank, central Philippines. PhD thesis, Imperial College London and Zoological Society of London.
• Hill NAO, Rowcliffe JM, Koldewey HJ, Milner-Gulland EJ. 2012. The interaction between seaweed farming as an alternative occupation and fisher numbers in the central Philippines. Conservation Biology 26, 324-334.

- Evidence around VSLA effectiveness (referred to by the Philippine name for them of CoMSCAs) can be found on the website of VSL Associates (vsla.net) and their associated SAVIX database.

- Evidence for many of the seaweed related problems can be found in these publications:

• Cottier-Cook et al 2021. Ensuring the sustainable future of the rapidly expanding global seaweed aquaculture industry - a vision. United Nations University Institute on Comparative Regional Integration Studies and Scottish Association for Marine Science Policy Brief. ISBN 978-92-808-9135-5
• Mateo et al 2020. Analysis of biosecurity-related policies governing the seaweed industry of the Philippines. Journal of Applied Phycology, 32, 2009-2022.
• A comprehensive reference list on the globalseaweed.org website.

- Evidence for many of the problems associated with marine protection in the Philippines that are being addressed by Coast 4C:

• Weeks et al, 2010. Effectiveness of marine protected areas in the Philippines for biodiversity conservation. Conservation Biology 24, 531-530.
• Burke et al 2011. Reefs at risk revisited. World Resources Institute. Washington DC.

- Increase the protection of coastal waters in target areas to achieve 30% protection. We record number and ha of iMPAs, and define the "target area" as the coastal area of targeted communities out to 3km from shore. As we increase the number of targeted areas over time, we have targeted ha that will be protected within iMPAs over the next 10 years, which links to our financial model in terms of target supply levels and number of communities that we need to work with.

- Reduce (ultimately eliminate) poverty within targeted communities. We use the Poverty Probability Index (PPI) developed and benchmarked by Innovations for Poverty Action. Currently, we measure this for all participating farmers - we conduct the short survey during an annual audit and survey of their farms. We need to explore how we can collect this information more broadly within the communities so that we can track broader impacts - as we expect benefits to come from improvements in fisheries and seaweed farming beyond our directly participating farmers. We also monitor the number of communities where we operate and the number of participating seaweed farmers (i.e. have received farm input packages and/or are registered suppliers into our value chain) and their farm performance and associated income in gender disaggregated data. Much of this data is collected through the KoltiTrace system that we worked with Koltiva to adapt to our context, and who provide this system through a SaaS with Coast 4C. We have annual targets for number of participating farmers and farm input packages that are linked to our financial model and which we report against. Finally, we are working with the TRANSFORM Initiative to define a "jobs created" indicator, which would convert the data on number of participating farmers into jobs created. This is a fairly complex process because smallholder seaweed farmers tend to have a diversified livelihood, so we need to be able to determine how much of their time they are spending on seaweed farming relative to other occupations (particularly fishing). We would benefit some interaction with the Solver team to support this process.

- Production of regenerative seaweed. We differentiate between three categories of seaweed from a sustainability perspective: traditional, transitional and regenerative, with definitions for each. We trade traditional seaweed as an entry point to build relationships, and the goal is to convert people through transitional to regenerative practices. We record (gender disaggregated) the number of people trained in sustainable cultivation practices, and the quantity of seaweed that meets the three criteria currently using a mass balance system. Farmers are assessed during the annual audit on their capacity to produce seaweed in each category, generating forecasts on how much of their sales they could reasonably report to us as meeting each category. Once they exceed their capacity for regenerative or transitional seaweed, additional sales are recorded as traditional. Data are recorded in KoltiTrace. Longer-term we want to find a solution for physical segregation of material.

Smallholder farmers and their local ecological knowledge and people power is the core technology that powers our solution! We augment this through improved farming technologies that we have developed through our own R&D in collaboration with farmers and "traditional" science, and harnessing the power of cloud-based mobile technologies through collaborations with Oceanfarmr and Koltiva. These mobile technologies provide efficiencies in delivery to large numbers of farmers, traceability within the value chain, and enable us to rapidly generate and analyse data for the purposes of decision making that improves farm management practices and performance, and allow us to share lessons learned across our multiple hubs spread over a large geography. We work with partners to develop low-cost sensors (Arribada Initiative) that generate real-time data on key environmental parameters (e.g. temperature, salinity etc) that feeds into these mobile technologies to support decision making, and to develop new strains of seaweed (University of the Philippines Marine Science Institute) that are more climate resilient. In addition to this, our farm inputs packages are heavily founded on behaviour change theory, and allow us to really leverage traditional knowledge systems - e.g. there are weekly "kapihan sa guso" (seaweed coffee) sessions in every community where farmers are able to compare lessons learned in a semi-structured environment, and we co-create with communities and establish experimental plots where we monitor performance closely to accelerate the learning processes. We work with partners (OceanPixel, The Climate Foundation, University of San Carlos, Zoological Society of London) to improve the typhoon resilience of seaweed farming and iMPA infrastructure, leverage mangroves to increase climate resilience of the communities, and increase disaster readiness for farmers and the community. We also leverage a holistic framework and our deep sectoral knowledge to integrate different components of the system (e.g. integrating regenerative farming with improved marine protection) that generates synergies for improved outcomes. Finally, we work with partners (e.g. University of Technology Sydney) to develop new and innovative biorefinery processing technologies that maximise the value from seaweed.

20 full-time staff.

5 part-time contractors

Overall, 17 years (going back to PhD research as starting point). Three years as Coast 4C.

As defined in our values, we strive to be impact driven, inclusive, of integrity, inspiring, innovative and respectful. Whilst the two co-founders are male, one is from the Philippines, and the other is British / New Zealander / Australian. In our boards, we have a total of 8 individuals, four females. Our board members' ethnicities include Philippines, Australian, British, Belgian, Chinese and New Zealander. Our executive team includes one female of four individuals, and ethnicities include Philippines, Malaysian, Australian, British and New Zealander. We seek to increase the diversity of our board and senior team, particularly increasing the representation from Southeast Asia and increasing the involvement of women in senior positions, which we consider important given that more than 50% (currently 54%) of our participating farmers and beneficiaries are women.

We have well-developed HR policies and associated training developed by professionals with team feedback that enshrine principles of diversity and inclusivity. Our values include being 'Inclusive' and 'Respectful', reinforced by our Code of Conduct that emphasises conduct that aligns with our values and policies. All staff are trained during onboarding in key policies and our Code and values, and have access to our staff handbook and full policies on the intranet. Our dedicated Equality and Diversity Policy underlines our commitments to diversity, further embedded through policies such as Recruitment and Selection, Anti-Discrimination, Anti-Bullying and Harassment, Safeguarding, Whistleblower and Grievance Handling. To facilitate access to opportunity and advancement, we have well developed policies on Training and Development which includes a process for Performance Appraisal that all staff undertake annually, the Performance Management System, and the Discipline and Code of Conduct. We recognise the practical challenges faced by our staff with the type of work that they do, and have a well developed Employee Benefits policy. We believe that our team are our most important asset, and we seek to attract and retain top talent in an environment that is conducive to delivering on our mission and values.

We have two key customers: smallholder seaweed farmers and their communities, and responsible global brands seeking a source of quality, responsible seaweed in quantity. Arguably, our most important customer and beneficiary are the smallholder seaweed farmers and their communities. The product or service that we provide farmers and their communities are the farm inputs packages and iMPAs (with the intervention and value proposition for these interventions described in previous sections of the solution). We provide the farm inputs package on a cost-basis currently with a small mark-up to help cover costs. Farmers pay us for this package over time to help address cash flow. For iMPA delivery, we primarily seek grant funding through our non-profit, and over time seek to reduce dependence on this by bringing a portion of profits from our commercial activities in the for-profit. Our main revenue stream comes from the sale of seaweed. We pay farmers a premium price for their seaweed contingent on meeting social and environmental criteria. We aggregate, provide quality control and traceability, conduct basic secondary processing (typically further drying and baling/packaging) and sell to seaweed processors - with the main focus being carrageenan processors. The value proposition for all carrageenan processors is larger deliveries (>20 metric tonnes per shipment) of high quality seaweed that meets their technical specifications. A selection of processors (typically export market) have additional requirements around sustainability (e.g. Cargill's Red Seaweed Promise(TM)) or specific quality requirements that are more difficult to meet. We sell to processors locally within the Philippines, where there is a high concentration of processors, and to higher value export markets. We have export accreditation. Whilst we do not seek a premium in the market, we are often able to obtain the top end of market prices thanks to our quality, traceability, and sustainability records. We are more competitive in the market than other seaweed traders because we have shortened the value chain, and have a highly efficient hub-and-spoke model that allows us to achieve economies of scale that other suppliers are not able to compete with, and are thus able to achieve a larger margin. Our key resources include our team, our deep sectoral knowledge and networks, and the level to which we are embedded within the producer communities. We partner directly with smallholder seaweed farmers and their communities, establishing Village Savings and Loan Associations as our special purpose cooperatives. We have strong relationships with local government authorities, having been accredited by local authorities (a special and further step beyond receiving local business permits, which allows us to form partnerships and enter into agreements with the local authorities) and with national and regional agencies, particularly the Bureau of Fisheries and Aquatic Resources.

Our impact is embedded within the revenue model of sales of regenerative seaweed. We are taking on a combination of strategically aligned grants in the early days that primarily focus on building the capacity of communities to produce regenerative seaweed (e.g. TRANSFORM, ORRAA) or to move expand into new areas (e.g. we were included in the approved WWF-GEF Blue Horizon project which will help us expand into Palawan), combined with investment to support our growth in the early years. Pre-seed investment capital was revenue-based finance from Conservation International Ventures. In the current seed funding round we have taken on investment from impact-aligned angel investors and Hatch Blue (a global catalyst for a climate-smart, truly sustainable and just seafood transition) through SAFE notes. Historically, our financing from grants and investment is roughly equal. With this funding we aim to grow our revenues from the sale of seaweed tenfold in two years and prepare for a Series A raise of $3-5m in 18-24 months so that we can scale within the Philippines and enter into the Indonesian market. We are ambitious with our impact objectives, so plan to invest in growth through a series of fundraising rounds (with reducing dependence on grant funding) that will enable us to scale more rapidly, and we are targeting break even on seaweed production and sales in year 5 (2028). We anticipate vertical integration into biorefinery processing from around year 5 that can further multiply the value of our seaweed supply, and enable us to shift to expanding our impact through reinvestment of profits. We had revenues of $225k in year 1, and are driving significant growth YTD in year 2, with five-fold growth in revenues from seaweed sales between Q3 of year 1 and Q3 of year 2. We are on track to hit our seaweed volume targets for year 2, although revenue has been affected by a drop in market price resulting from the global economic down-turn that succeeded a record peak in demand of carrageenan products associated with the global pandemic. This has demonstrated the interest in our product as we continue to sell seaweed with very short/no storage time despite the poor market conditions. We anticipate a recovery in prices in the next year, which will support our ability to hit revenue targets as we have succeeded in capturing targeted market share.