March 9, 2018

Aqua-Spark, the pioneering Dutch pure-play sustainable aquaculture investment fund, announced it has made an investment in Hatch 1.0, the first global accelerator created to back early-stage aquaculture startups.

Launched in January of this year in Bergen, Norway, by Dr. Carsten Krome of Alimentos Ventures, along with Georg Baunach, and Wayne Murphy, Hatch 1.0 is operating through a partnership between Krome and NCE Seafood Innovation Cluster and Bergen Teknologioverføring (BTO) to offer innovative early stage aquaculture startups support in the form of capital and business support.

“The Bergen environment is perfect for innovative aquaculture start-ups,” said Anders Haugland, CEO of BTO, in January. “The headquarters of major industry players like Marine Harvest, Grieg Seafood, Lerøy Seafood Group, Cargill Aqua Nutrition and others are all based within walking distance of the accelerator venue. They are all important partners in the NCE Seafood Innovation Cluster, which is also where our offices are situated and we are working very close with. The Hatch programme is a fantastic opportunity for us to further attract international and local innovation to the area.”

Under its fund structure, Aqua-Spark focuses on growth stage investments in small-to-medium enterprises (SMEs). However, this tie-in with Hatch 1.0 broadens Aqua-Spark’s reach, giving the fund exposure to early-stage funding opportunities, while also providing Aqua-Spark with successful growth stage enterprises down the line.

“Aqua-Spark often encounters great ideas, products, and technologies that could have benefitted from ideation phase support,” explained Mike Velings and Amy Novogratz, co-founders of Aqua-Spark. “Further, it is imperative that we develop a way to finance early stage aquaculture ventures, which Hatch is doing. Between Aqua-Spark and Hatch, there is a clear opportunity for a symbiotic partnership that will improve collective deal flow. We can direct smart, early-phase companies to Hatch, and as Hatch actively finds and grows early stage startups, Aqua-Spark can absorb those that have progressed beyond accelerator. It is a holistic win for the aquaculture industry as a whole.”

Timely and Strategic

Expanding an investment presence within the growth curve of the sustainable aquaculture industry is a timely and strategic move.

Driven by macro-trends that include population growth, shifting wealth distribution, and changing dietary demands toward more protein content, investing in aquaculture in emerging markets is becoming a topic earmarked for investors discussion.

“Since 1960, global demand for seafood has increased 3.2 percent annually, outpacing the 1 percent annual growth in the world’s population over the same time period,” noted Philippe de Lapérouse, managing director of HighQuest Group, in the piece Technology Plays in Aquaculture published in the GAI Gazette.

Rising global populations and increasing wealth – particularly in emerging economies – along with diminishing wild fish numbers have put pressure on the aquaculture industry to fill the gap in supply.

Predictive modeling by The World Bank estimates that by 2030, 62 percent of food fish will be provided through aquaculture, and from 2030 onward, aquaculture will dominate supply in the industry, according to the report, Fish to 2030, Prospects for Fisheries and Aquaculture.

Data from the UN Food and Agriculture Organization (FAO) states that global aquaculture output hit 73.8 million tons in 2014. Leading in output is China, however, the organization finds that growth in other emerging countries is quickly outpacing that in China. Aquaculture production in Nigeria, for instance, has increased 20-fold in only the past 20 years, and growth in the rest of sub-Saharan Africa is close behind, according to the organization.

This growth, along with the fact that aquaculture is a much broader investment space than say, beef or poultry, gives patient investors with a thematic mindset the opportunity to invest in a range of categories within the sector including breeding, gene editing, waste management, water quality, production tech, protein conversion, or value-added processing.

The First Cohort

This investment by Aqua-Spark will be used to support the acceleration of Hatch 1.0’s first cohort of eight startups.

Beginning in April and running through June, Hatch’s first eight-member cohort will partake in a three-month long intensive program that includes housing at BTO, €25,000 (US$36,000) in funding, coaching, and access to Hatch’s network of entrepreneurs, industry professionals, and the industries top farmers and suppliers, as well Hatch’s support in securing additional grant funding in Norway, and the ability to conduct product trials with the incubator’s R&D partners located across Europe.

“Additionally, teams will also have completed significant technical proof-of-concept work either in the laboratory or with our technology/farming partners,” noted Krome in January. “Ultimately, the primary focus of our accelerator will be on building capability in our participants and enabling them to scale their company to match their global ambitions. What we require in return from the founders is 100 percent commitment in terms of time and effort.”

-Lynda Kiernan