Hub Azul Portugal


It is the pragmatism of the entrepreneur and the investor that embodies the scientist’s passion, and makes the sustainable blue economy a reality that generates jobs and inclusive wealth.

By Ruben Eiras – Secretary General of the Ocean Forum

Blue biotechnology is propagated as a promising area for sustainable development and innovative growth of the Portuguese sea economy. Indeed, the potential of its applications is immense: food, cosmetic, pharmaceutical and even industrial. In addition, it has the special particularity that many of these applications can be performed in a controlled environment, with laboratory replication and with a minimum extraction of biomass from the ecosystem. And it is also an area in which Portugal is strong scientifically.

However, despite all these advantages, the fact is that the blue biotechnology sector is slow to deliver commercial value in relation to the expectations created. Let’s look at investment numbers and trends. According to the latest data on the Azul Dealroom Hub, the digital ecosystem platform that connects investors with entrepreneurs managed by Fórum Oceano under the PRR Hub Azul project, the business market value of the blue biotechnology sector does not go beyond 838 million euros – in contrast, compared to another emerging sector, the blue renewable energy, this is already at a market valuation level of 6.9 billion euros. In addition, in the Blue Invest Report 2022, published by the European Commission and conducted by the PWC Portugal team, the blue biotechnology sector is one in which investors expect to reduce their exposure over the next three years.

How then to explain this apparent disconnect between the high public perception about the viability of blue biotechnology and the trend of retraction in the investor community? First, it is necessary to take into account that there is usually a temporal “decalogue” of delay between the moment of investors’ decisions and the public perception of a row. That is, usually investors, being much closer to the dynamics of reality on the ground, anticipate the installation of the dominant trend. And what we’re seeing in the blue biotechnology row is exactly this behavior.

The high risk of blue biotechnology
Second, what are the causes of this downturn? The blue biotechnology sector is not immune to the dynamics of events in other areas of biotechnology. That is, the conviction of the entrepreneur Elizabeth Holmes regarding the business model of her startup Theranos printed in the market a “hyper-elevated” risk profile to investments in biotechnology. This means that the investor will play a highly prudent and conservative role in analyzing biotechnological business models.

Moreover, in the particular case of Portugal, the current business ecosystem for blue biotechnology is narrow and low-scale. With the exception of food, our country does not have large companies with high-scale investment capacity and long-term “marathon” in the cosmetic and pharmaceutical sectors, for example.

B2B: the strategic market to explore
So it means we should just put blue biotechnology aside and focus on other sectors of the blue economy? Nothing like that. The reality indicates that it is crucial to identify in which areas of the value chain of the blue biotechnology sector Portugal should position itself strategically.

Data from the Hub Azul Dealroom platform will help us identify possible routes. When analyzing the information in the list of companies by biotechnological sector focus, it appears that most of them and with higher appreciation is located in the food sub-sector, especially in the manufacture of new food products, for the B2b market.

Therefore, one of the strategic “insights” possible from this information is that Portuguese startups should focus their efforts on blue biotechnology on innovation for the creation of “food components” for use in the manufacture of final food products. For example, creating an algae meal for application in energy bars, breakfast cereals or pet food.

At first glance, this reading can be interpreted as unambitious, simplistic and low sophistication. But at the end of the day it is the business model that is working and monetizing science that founds entrepreneurial initiative – it is the pragmatism of the entrepreneur and the investor that embodies the scientist’s passion, and makes reality the sustainable blue economy that generates jobs and inclusive wealth.

Article published in Jornal de Negócios: