By Lynda Kiernan
Pure play aquaculture tech VC HATCH has closed its first fund oversubscribed at $8.4 million after opening 11 months ago. Plans for the funds include capital commitments to HATCH’s own portfolio, and to support a fourth cohort for its accelerator program, which is accepting applications as of February 12.
Launched in January 2018 by CEO Carsten Krome of Alimentos Ventures in Bergen, Norway, HATCH partnered with NCE Seafood Innovation Cluster and Bergen Teknologioverføring (BTO) to offer innovative early stage aquaculture startups support in the form of capital and business support.
Following a very successful initial program in Bergen, the accelerator moved to Cork, Ireland for its second cohort which began in September 2018, through December 2018.
“In Bergen, we had eight start-ups from seven countries, which went through 30 mentor sessions, met 40 investors from 17 different countries, and got investor-ready in 90 days,” said program director Wayne Murphy last April.
“Two of the companies came away with six-figure investments, and a very clear idea of where they were headed in the aquaculture world. All of the companies were delighted with the development experience, unparalleled international networking, and business and investment opportunities they gained.”
All told, HATCH made 16 investments throughout 2018, and saw two successful cohorts consisting of 14 worldwide aquaculture startups, which have gone on to raise more than €6 million (US$6.7 million) in follow-on funding.
In April 2019, HATCH opened in Hawaii to manage and oversee the operations of a joint endeavor between the Natural Energy Laboratory of Hawaii Authority (NELHA), the Hawaii Strategic Development Corporation (HSDC), and the University of Hawaii’s UH Ventures, LLC (UHV).
For its Hawaii cohort, HATCH managed between 10 to 14 participants that took part in the next 15-week program at the Natural Energy Laboratory of Hawaii Authority in Kailua-Kona. The program is being funded for the initial three years with funding provided by the Hawaii State Legislature and the U.S. Economic Development Administration, and is expected to foster three cohorts of 10-12 aquaculture startups per year.
After Hawaii, HATCH expanded into Singapore.
“We decided to take HATCH to Singapore because of its close proximity to most large aquaculture markets, the presence of large aquaculture suppliers, and great access to Asia-focused venture capital,” said Georg Baunach, co-founder and director of HATCH, last year.
It was there, at a recent demo day, Managing Partner Carsten Krome said, “It’s those first LPs, those first investors that we are grateful for. We’re a first-time fund manager. This means that people ask you if you even know how to raise a fund, how to identify good companies, how to transact in those companies. We knew we know that, but to bring this across and to get people’s trust is another issue.”
That trust is also being earned by the expertise HATCH has attracted to its board, which includes founder and former CEO of Rubicon Resources Brian Wynn, former CEO of EWOS, Einar Wathne, and Silicon Valley entrepreneurs Eric Archambeau and Kai Sato.
Closing oversubscribed is also a direct reflection on how investors are realizing the potential in aquaculture and its related technologies – macro-trends that include population growth, shifting wealth distribution, and changing dietary demands toward more sustainable protein content are making aquaculture an investment class positioned for growth.
“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 in a sustainable manner – something that is a focus of the HATCH program.
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.
– Lynda Kiernan is Editor with GAI Media and daily contributor to the GAI News and Agtech Intel platforms. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.