October 23, 2024

By Gerelyn Terzo, Global AgInvesting Media

In its second close and surpassing its target size achieved in March, the Blue Revolution Fund (BRF), a collaboration between Ireland-based VC firm Hatch Blue and non-profit The Nature Conservancy (TNC), has attracted €93 million (US$100.2 million) in commitments to back sustainable aquaculture technology. BRF, Hatch Blue’s sequel fund, will direct the proceeds toward investing in early-stage aquaculture startups as it endeavors to improve ocean health, combat the effects of climate change and add jobs to coastal regions.

The investor lineup includes the European Investment Fund (EIF), Irish Strategic Investment Fund (ISIF) and Germany’s Rentenbank. BRF, which touts both environmental and financial success, is overseen by investment manager Hatch Blue and advised by TNC. The fund’s strategy is to catalyze private investment in sustainable aquaculture projects and companies that can both deliver financial returns and improve environmental performance compared with conventional production methods.

As of Q1, the Hatch Blue fund hovered at €75 million (US$80.8 million), which despite taking longer than expected to raise would enable the organizations to support founders in the aquaculture sector. BRF, which has already begun deploying capital, will continue to invest in next-generation fish farms, regenerative seaweed and bivalve farming, nutrition, enabling technology, health and genetics, and alternative seafood.

According to data cited by TNC and Encourage Capital, “by 2030, the aquaculture sector will require an additional $150 billion-$300 billion in capital investment to expand production infrastructure capacity to meet projected demand growth.” As the fastest growing method of food production, aquaculture is responsible for contributing more seafood than wild fisheries, per the World Aquaculture Society. By the coming decade, the aquaculture sector is predicted to attain 109 million metric tons in production, an increase of nearly one-third compared with 2018 levels.

So far, BRF has invested in half-a-dozen portfolio companies. Among them, it has backed Norway’s CageEye, which specializes in improving aquaculture feeding processes using echo-sounding devices to help farmers get to know their fish better. BRF also invested in Canadian startup DeNova, a single-cell protein producer that’s looking to replace soy protein and fish meal with a farm-free protein in aqua feeds.

Global aquaculture production represents a patchwork structure led by Asia, commanding a 91.6 percent share of production as of 2020, more than half of which originated in China. Meanwhile, according to the World Bank, close to 90 percent of global marine fish stocks are either fully exploited or overfished.

The Nature Conservancy Director of Global Aquatic Food Systems Robert Jones stated, “With the right practices and technologies, aquaculture can be a force for good, providing a low-carbon food source while actively supporting ocean health.”

Hatch Blue Co-Founder and Managing Partner Georg Baunach said, “We are a knowledge-driven specialist firm with synergetic business activities…Our setup generates unique insights that allow us to add value to our portfolio firms, investors, and other clients. The final closing of the BRF above our target of €75 million is a promising sign that the investment community values this approach.”

Lauren Ferstandig, managing director of The Nature Conservancy’s impact investing division NatureVest, commented, “Private capital needs to play a crucial role in addressing the climate and biodiversity crises. The Blue Revolution Fund is an example of a scalable investment solution that not only delivers a financial return to investors but also models a more sustainable approach to aquaculture investing by building measurable conservation outcomes into every investment.”

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