June 13, 2017

Dutch biotech startup, Protix, which breeds insects for sustainable animal feed production, has raised €45 million (just under US$50.5 million) in a recently closed round including Aqua-Spark, Rabobank, BOM, and additional unnamed investors.

Founded in 2009 by former McKinsey & Company colleagues Kees Aarts and Tarique Arsiwala, Protix takes its inspiration from nature and uses low-grade organic waste as feedstock to produce insects for the production of high-quality proteins, lipids, and micro-nutrients for use in animal feed rations. Through this process, the company is able to supply a low-impact protein alternative that can serve to help meet growing demand for fish, meat, and eggs from a growing global population.

It is the potential impact that such a startup could have for the aquaculture space that drew the attention of pure-play, sustainable aquaculture investment firm Aqua-Spark.

“We’ve been researching the insect industry for many years, and Protix stands out because of its potential to be pivotal in the development of a sustainable aqua-feed solution,” said Mike Velings and Amy Novogratz, founders of Aqua-Spark. “We’re selective about the companies we invest in; and Protix fits well with Aqua-Spark’s portfolio, and aligns with our mission and values.”

This investment follows upon Aqua-Spark’s two investments in Madagascar and the U.S. announced at the turn of the year.

Madagascar-based sea cucumber farming operation Indian Ocean Trepang joined the selective Aqua-Spark portfolio upon the fund investing $2.5 million in the company.

Considered a delicacy in many Asian markets, sea cucumbers are in high demand from increasingly affluent consumers. Additionally, the species are what are known as ‘deposit feeders,’ or an aquatic animal that feeds on organic matter that drifts through the water, settling on the bottom – meaning they have the ability to clean the environment while not requiring any additional feed. Furthermore, the species can be used in land-based aquaculture operations to mitigate effluent – all attractive factors to investors. However, for Aqua-Spark, which has existing investments in land-based fish farms Sogn Aqua and Matorka, the addition of such a company to its portfolio represents an intriguing prospect for potential scale and growth through cross-application.

“They are at once helping to revive an endangered marine animal and providing a sustainable filtering method for fish farms, while also creating jobs in key markets,” explained Velings and Novogratz. “We’re thrilled to be working with such an impactful company, and connect them with our network of farms and technologies.”

Aqua-Spark also announced its initial launch into the consumer market with its $2.5 million investment in LoveTheWild – a U.S.-based producer of sustainable, ready-to-prepare, frozen seafood meal kits. The company has a double mission – to take the intimidation factor out of preparing seafood dishes and to encourage consumers to broaden their choices beyond traditional choices such as salmon, to more sustainable, environmentally-friendly species such as barramundi or striped bass.

Recent prior investments by Aqua-Spark include its commitment of  $2.5 million to a $5.5 million round raised by Iceland Arctic char producer, Matorka, in July of last year. The balance of the round was attributed to “various international and local investors,” Matorka CEO Árni Páll Einarsson told Fish Farming Expert.

Rabobank has been an investor in Protix since its beginning when the two parties were introduced through the Dutch Green Tech Fund (currently called Shift Invest). This investment positions Rabobank at the forefront of a burgeoning investment segment which has been buoyed by the EU Commission’s approval of insect-derived protein for inclusion in aquaculture feed rations on December 13, 2016.

-Lynda Kiernan

Lynda Kiernan is Editor with GAI Media and daily contributor to GAI News. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.com.