Case 9_ Group 13
Case 9_ Group 13
SWEN BLUE OCEAN : Impact investing
goes to sea
Group 13
Section: A
Case-9
SL. No. Name ID
1 Shakil Ahamed 1448
2 Hosenara Akter Daji 1711
3 Md. Mominul Islam 1502
Company Profile
Company Name: SWEN Blue Ocean
Headquarters: Paris, France
Founded: 2021 (as part of SWEN Capital Partners)
Assets Under Management (AUM): €171 million (as of
2023)
Industry: Sustainable & Impact Investing
Focus Area: Ocean sustainability, Blue Economy
Economic
Analysis
SWEN Blue Ocean manages €171 million, investing in
ocean sustainability startups, with a targeted IRR of 20%.
WSense is an innovative deep-tech firm, but its revenue
model is unproven, and it has a high burn rate
(€420K/month).
The blue economy is growing rapidly, projected to reach
$3 trillion by 2030, increasing investment opportunities.
Investment risk lies in WSense’s market adoption and
ethical concerns, requiring strong governance and phased
funding.
Industry Analysis of SWEN BLUE
OCEAN
Porter’s Five Forces
Bargaining Threat of
Bargaining
Threats of Rivalry power of substitutes
power of
New entrants among suppliers customers
competitors
Moderate Moderate to Low High High
High
PESTLE Analysis
Political Factors Economical Factors Social Factors
Legal Factors Environment Factors
Technological Factors
Swot Analysis of SWEN BLUE OCEAN
SWOT Analysis
E
Environmental
Factors
Problem Statement
Should SWEN BLUE OCEN INVEST IN THE WSENSE?
Different Scenario
Base Case Scenario
Best Case Scenario
Worst Case Scenario
Business Risk
Moderate to High
Business Risk Premium
Country Risk PremiumLow
Project Risk PremiumModerate
Calculation of Discount Rate
Particulars Base Case Worst Case Best Case
Risk free rate 4% 4% 4%
Beta 1.4 1.8 1.1
Risk premium 6% 6% 6%
Cost of equity 12% 15% 11%
Country risk premium 2.00% 2.00% 2.00%
Project Risk premium 4.00% 5.00% 3.00%
Discount Rate 18.40% 21.80% 15.60%
Real Option Valuation – Base Case
Scenario
Real Option Valuation
Forecasts
2022E 2023B 2024E 2025E 2026E 2027E
Particulars
0 1 2 3 4 5
Net Cashflow (% of Project) 5% 10% 15% 30% 35%
Net Cashflow (74.66) (284.73) (416.94) 1,299.10 6,649.61
PV of CF (63.06) (203.11) (251.20) 661.05 2,857.84
Total PV pf CF 3001.52
Initial Investment 6000.00
Assumptions
Depreciation (% of Revenue) 6.00%
Corporate Tax Rate 25.00%
Project Discount Rate 18.40%
Net Working Capital (NWC % of EBITDA) 2.00%
Salvage Value (% of initial investment) 5.00%
Initial Investment (EUR thousands) -6,000.00
Real Option Valuation – Base Case
Scenario
Spot Price (S) 3,001.52
Strike Price (X) 6,000
Volatility 40.00%
Risk free 4.00%
Continious Compounding 4.08%
Time 5
d1 -0.10
d2 -0.99
N(d1) 0.4605428749
N(d2) 0.1602347975
C (value of real option) 598.36
Comparisons
Particulars Probability NPV
Base Case 50% $17,780.30
Best Case 25% $98,894.16
Worst Case 25% -$4,844.62
Expected NPV $32,402.54
Particulars Probability IRR
Base Case 50% 56.13%
Best Case 25% 131.01%
Worst Case 25% 4.81%
Expected IRR 62.02%
Discount Rate 18.55%
Difference 43.47%
Recommendations
As NPV is Positive and IRR is greater than
the discount rate SWEN Blue Ocean can
choose the investment
A
Any
Question?
. .
E
Environmental
Factors