OceanGate raises $18M to build a bigger submersible fleet and set up Titanic trips

OceanGate’s team puts the Cyclops 1 submersible through its annual maintenance check at the company’s shop in Everett, Wash. (OceanGate Photo)

OceanGate says it has raised $18.1 million in new investment, laying the financial groundwork for an expansion of its fleet of deep-sea submersibles and setting the stage for dives to the 108-year-old Titanic shipwreck in 2021.

The funding round was reported in documents filed today with the Securities and Exchange Commission. OceanGate CEO and founder Stockton Rush said the figure reported in the documents, $19.3 million, would be amended to reflect the actual size of the round.

He declined to identify the investors, other than to say that “it was 100% insiders.”

This is shaping up as a rebuilding year for the nearly 11-year-old venture, based in Everett, Wash. The main task on the agenda is to build two new submersibles capable of diving as deep as 6,000 meters (3.7 miles), which is more than a mile deeper than the part of the North Atlantic ocean floor where the Titanic is resting.

OceanGate will take advantage of lessons learned during the construction of its carbon-hulled Titan submersible, which was originally built for Titanic journeys. Rush said tests that were conducted at the Deep Ocean Test Facility in Annapolis, Md., revealed that the Titan’s hull “showed signs of cyclic fatigue.” As a result, the hull’s depth rating was reduced to 3,000 meters.

“Not enough to get to the Titanic,” Rush said.

That meant the Titanic trips — which had been planned at first for 2018, then 2019, then 2020 — had to be put off until mid-2021. By that time, Rush expects the new submersibles to be ready to enter service. He said mission specialists who have paid more than $100,000 each to participate in the Titanic expeditions were “generally supportive but disappointed” by the delay.

Completing the latest funding round will open the way for proceeding with the Titanic trips and other expeditions on OceanGate’s agenda.

“In the next couple of months, we’ve got a number of things that are on the slate,” Rush said. “As you can imagine, a lot of those were in limbo pending the financing closing. Now that we’ve got it, we’ll be signing some interesting partnerships.”

He said one of those partnerships involves doing environmental assessments for deep-sea mining operations. OceanGate also plans to resume a series of shark research dives in Possession Sound with another one of its submersibles, Cyclops 1. And during the month of August, the company will take Titan into the Hudson Canyon, a deep channel that stretches out into the Atlantic from the mouth of the Hudson River.

Like the Titanic expeditions, the trips to what’s known as “the Grand Canyon of the Ocean” will carry researchers as well as mission specialists who are paying to participate. (The cost is $75,000 for a team of three, Rush said.)

In the past, OceanGate has explored the historic wreck of the Andrea Doria, the hunting grounds of the elusive sixgill shark in Puget Sound (with Seattle rapper Macklemore along for the ride), and the underwater flora and fauna of the Salish Sea. Thanks to the new funding, the company should be able to keep pushing into farther, deeper frontiers.

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