After Derivatives, Betting on Crispy Seaweed Chips

Until last year, Robert Mock sold financial derivatives at Bank of America Merrill Lynch. Today, he sells something completely different: seaweed chips.

The crispy snacks, which he developed with three other fathers of young children, have been flying off the shelves since Whole Foods and other stores picked them up in January. The start-up, known as Ocean’s Halo, has now attracted prominent backers, including Jerry Yang, a co-founder of Yahoo.

Mr. Yang is participating in a $2 million financing round for Ocean’s Halo that is expected to close this week. Robert F. Sharpe Jr., a former ConAgra executive, is leading the investment round and has joined the company as its chairman.

For Mr. Mock, the chief executive, the venture is a far cry from his previous line of work selling credit-default swaps and subprime-mortgage derivatives. He spent five years based in San Francisco managing Bank of America’s rates and currencies origination for commercial clients on the West Coast. He worked at JPMorgan Chase in Dallas before that.

“I would just describe it as complete opposite ends of the spectrum,” Mr. Mock, 42, said in an interview on Tuesday. After resigning from finance last March, he said, “I haven’t missed it yet.”

He is now betting on the viability of a quirky chip that counts health benefits and environmental sustainability as two of its selling points. To fine-tune the chip and tweak its level of seaweed flavor, the four founders, and a food scientist they hired last year, went through more than 50 variations.

Venture capital investors have opened their wallets recently for a number of food-related start-ups, which are trying to bring Silicon Valley’s ethos of “disruption” to the kitchen. These have included brick-and-mortar chains, like Sweetgreen and Blue Bottle Coffee, and also companies creating new concoctions to be sold in grocery stores.

The founders of Ocean’s Halo arrived at the idea while discussing how much their children loved eating sheets of seaweed. Mr. Mock, who grew up eating potato chips in Texas, said he was surprised at how much he enjoyed seaweed’s taste.

“The idea was, what if we put this in a form that Americans are more used to, i.e., a chip?” said Michael Buckley, 45, one of the founders, who works in communications at Facebook.

The company, based in Burlingame, Calif., got going in 2011, but the founders started taking it more seriously in late 2012 and last year. At one point, while experimenting with recipes, they started a fire in the kitchen of Michael Shim, one of the founders, who formerly was an executive at Groupon and Yahoo.

It was through Mr. Shim that Ocean’s Halo was introduced to Mr. Yang.

“These guys are passionate and smart, but they’re also applying some of the principles of technology innovation to food,” Mr. Yang said in a statement by email. “They have a real chance to develop a global brand that perfectly fits a number of broader societal trends including healthier living and sustainability.”

To source the ingredients, the company met with seaweed farmers in Korea. One of the founders, Shin Rhee, who is the president of the company’s international operations, is based in Beijing.

They unveiled their product last October, raising an initial $1.7 million financing round and selling the chips in a handful of stores. But this year, after Whole Foods started selling the chips in several regions, more specialty stores signed on. Other major retailers are expected to start selling the chips soon, including Safeway stores starting next month.

Since January, orders have tripled, according to Mr. Mock. The company says it recently sold its 100,000th bag of chips.

Mr. Mock is not sentimental about his days in finance, pointing out that the derivatives business has come under scrutiny since the financial crisis. But in certain ways, he is using his financial experience in his seaweed venture.

“We definitely formed this business model based on having hedges, like backups, in place,” Mr. Mock said. “Secondary suppliers, secondary distributors, secondary bakeries. We’ve treated business decisions with hedging in mind.”

His former colleagues at Bank of America and JPMorgan initially thought he was crazy when he went to sell seaweed chips, Mr. Mock recalled. But many are now fans of the product.

“The guys in San Francisco say, ‘Hey these are great,’” Mr. Mock said. “The guys in Texas say, ‘Dang, these aren’t so bad.’”