Brian Halligan spent much of his career in software sales, before cofounding HubSpot, the Cambridge firm that helped pioneer so-called inbound marketing, in 2006.
But he says that helping to advance climate-related technologies was an itch he had long wanted to scratch. It wasn’t until 2021, when he handed the reins of HubSpot to another leader, following a serious snowmobile accident, that Halligan felt that the time was right.
“If you’re CEO of HubSpot, a public company, there’s no time for scratching,” he says.
This week, Halligan is taking the wraps off a new investment fund, Propeller Ventures, that has $100 million to invest in ocean-related technologies that will address climate change. The Woods Hole Oceanographic Institution on Cape Cod is a key research partner for the new fund. Halligan says he hopes the money can help spawn more startups from that nonprofit research organization, as well as from other universities.
I spoke with Halligan, who still serves as executive chairman of HubSpot, about the new fund. The transcript has been lightly edited for clarity.
Q. How did you decide to focus in on ocean-related technologies that could affect climate change?
A. I visited a bunch of venture capitalists and startups and universities, and I had a really good trip to the Woods Hole Oceanographic Institution on the Cape. Everywhere I went, it seemed like the more people knew about climate change, the more pessimistic they were. But the oceanographers are super optimistic about climate change. The ocean produces about 50 percent of our oxygen, it stores carbon dioxide, and it absorbs excess heat. They’re optimistic that if we’re super careful, we can solve climate change in the ocean.
Q. I’m guessing that Woods Hole was looking to you as a potential donor.
A. Yes, that’s exactly what they were thinking. I made a donation, and we had a fundraising dinner on the front lawn of the president’s house. But how many dinners can we have? I felt like it just would not be enough. I had lunch with Peter de Menocal, the president of Woods Hole, about a year ago, and the thesis behind the lunch was philanthropy is great and it’s working, but we need to get capitalism to work on this problem.”
Q. Boston and Rhode Island seem to have a lot of programs to support ocean tech, or “blue tech,” like SeaAhead, a startup incubator with a venture fund attached to it, and the Blue Venture Forum. Where do you see Propeller fitting?
A. This is the first legit venture fund going at this in the United States. What SeaAhead is doing is awesome, and there are startup accelerators that have focused on ocean tech. There are also a lot of climate-change-oriented venture funds, and a bunch of them are in Boston. Our angle is the ocean. I think the ocean should be a big part of the answer to climate change. We want to turn Woods Hole into an engine for creating startups, like MIT is. And there’s a metric ton of activity going on between MIT, Caltech, University of Rhode Island, University of Hawaii, the Scripps Institute. We’ve just been a magnet for stuff. And we’ve already done three deals.
Q. Who are the investors, the limited partners, who have put money into this $100 million fund? Are there other HubSpot alumni involved?
A. I don’t want to talk about the LPs. You should assume I’m a sizable investor. Woods Hole is a financial investor.
Q. What are some examples of the types of things you plan to fund?
A. The ocean is full of things like lithium. The US is desperate for access to lithium for batteries. We’re looking at a company that would mine lithium from the ocean in a very clean way. Another startup is focused on the shipping industry, which produces 3 percent of carbon dioxide emissions. We’re talking to a Caltech professor who wants to process that and turn it into an inert material. There’s another guy from MIT who has technology, so if you’re running a seaweed farm or you’ve got a fish farm or a mangrove swamp, you need to check the carbon dioxide levels, oxygen, pH levels. Today, you might send a ship out, collect water, and bring it back to the lab. But this could be a new generation of sensors to do that remotely.
I think the seaweed industry will get to be a large industry — farming it, selling it to animal food manufacturers. Then people will start planting large seaweed farms in order to sell carbon credits. That sensor company can provide information [about how much CO2 the seaweed is absorbing], to enable the Moody’s of the carbon credits industry to emerge.
We ran an “Ocean MBA” class over the course of a week this summer at MIT, and we invited people in from the startup community. Out of the dozen companies we let in, we found our first three investments.
Q. When I saw you earlier this year, you said you think Boston can be a real leader in climate tech, in a way that maybe we aren’t in software or consumer tech right now.
A. Boston has a real shot to be the center of the universe for climate tech. There are six climate tech unicorns in Boston [private companies with a valuation of $1 billion or more], and eight in Silicon Valley. There are a bunch of great venture firms here doing climate stuff, like Breakthrough Energy Ventures, The Engine, and Azolla Ventures, which spun out of Prime Coalition.
I feel a lot of momentum in Boston around this. It feels like a lot of the ingredients are taking hold. It’s like the software industry in 1988, where you had a handful of investors and companies. It’s still early, but Boston has got a chance to build something awesome here.
Q. Part of the challenge with climate tech is that this technology can take a long time to perfect, and we haven’t always seen ways for these companies to go public or get acquired, and return money to their early investors.
A. A couple things have changed. The urgency around climate change is a lot different today than it was back then. The money pouring into it, and the technology pouring into it, is at a much different level. The technology has come a long way – software, hardware, battery technology. Everything is maturing nicely. I agree with you that it’s early. But in the early days of the software industry, when PTC and Oracle and Microsoft were young, who were you going to sell companies to then?
I think there will be big, big companies created, and lots of IPOs and acquirers over time.