April 25, 2023

By Lynda Kiernan-Stone, Global AgInvesting Media

Vietnam is a bit of a dark horse when it comes to shrimp and shrimp farming. The country is the world’s second largest exporter of shrimp, with the crustacean accounting for nearly half of the country’s revenue from seafood. And as the industry continues to rapidly grow, expectations were that its shrimp production would surpass 980,000 tons as export values tipped a record $4.3 billion in 2022, according to the Vietnam Association of Seafood Exporters and Producers. 

Due to how quickly demand is rising, Vietnam’s producers have a goal to triple national production, but are finding it difficult to keep up with expansion in a sustainable way. These challenges are only compounded by high entry costs, a great level of fragmentation in the industry, and a lack of access to the latest sustainable farming practices and private capital, not to mention climate change and market issues. 

Changing the direction for the industry is Tepbac – a Vietnamese shrimp technology platform that has announced $2.25 million in funding led by Netherlands-based Aqua-Spark, and including AgFunder, and Vietnam-focused venture capital fund Son Tech Investment. 

Founded by Phong Tran, whose family have been shrimp farmers for 25 years, Tepbac supplies farmers with IoT-enabled hardware and a data-based platform with a mission to digitize shrimp farming and help farmers improve performance for a better quality of life.

The company’s flagship innovations include “Envisor”, a remote water cleaning and monitoring device able to track water conditions such as pH, oxygen levels, temperature, and salinity. Phong also built the framework for the Farmext mobile app, which provides farmers with software and hardware to help automate their operations. 

“I started Tepbac to help shrimp farmers, first in Vietnam, and later around the world,” said Lam Nguyen, co-founder, Tepbac. “With better tools, increased production, and improved quality, we can develop a more sustainable global aquaculture industry. The support of these investors signals the strength of our model and an important shift in the industry.” 

Because Tepbac began as a media company and has an established media brand, its level of product readiness and strong relationship with farmers in the country gives it a decided advantage when addressing the challenges being faced within the shrimp farming value chain through better digitization and data. 

“Since our initial investment into Tepbac via the AgFunder GROW Impact Fund, we have been impressed with the waves that Tepbac has been making in Vietnam’s shrimp farming industry,” said Angela Tay, senior investment associate, AgFunder Asia. “Tepbac’s unique platform – its media assets, e-commerce platform, and comprehensive suite of software and IoT devices, positions them to become the leader in a blue ocean market. We look forward to continuing to support Phong and his team as they scale their business in Vietnam and beyond.”

Currently, Tepbac is serving 1,500 farms, spanning a clientele list ranging from small-to-large scale farmers, to shrimp processing plants, and the government, having shown cost reductions of up to 20 percent and profit increases of 30 percent. 

With this capital, the company stated it intends to scale its technology stack for better risk reduction, simplifying of farming operations, and cost savings for farmers as they are better able to make more informed decisions. 

Participating investor Son Tech has long recognized the deep need for technology to advance Vietnam’s shrimp farming industry, but also if this technology is to be successful, it will require more than capital to generate lasting positive impacts. 

“Son Tech members have been iterating on an agri-tech thesis for almost a decade, even before the fund establishment,” commented Tung Tran, investment manager, Son Tech. 

“Together with Aqua-Spark and AgFunder, Son Tech hopes to support Tepbac in their journey to truly transform aquaculture end-to-end. This, if executed correctly, can generate rippling benefits across the whole industry – to name a few: train more agri-tech talents, create the first agri-infrastructure and platform, and set a powerful example of executing an agri-playbook.”

Lissy Smit, CEO, Aqua-Spark, noted, “We’re immensely pleased to welcome Tepbac into our portfolio. With Vietnam’s focus on increasing sustainable production of aquaculture and the limited number of aquatech companies currently serving the Vietnamese, Tepbac is uniquely positioned to digitize aquaculture while solving pain points along the way.”

Smit concluded, “Tepbac’s platform captured our attention because it has incredible potential to improve market access for small farmers and enable more sustainable practices, all while growing and protecting one of the largest shrimp markets in the world.” 

~ Lynda Kiernan-Stone is editor in chief with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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