Interview: Investing in Sustainable Aquaculture
Following the release of the TNC’s and Encourage Capital’s report on the opportunities within sustainable aquaculture, I caught up with Mike Velings, founder and managing partner of Aqua-Spark, a Netherlands-based sustainable aquaculture fund. It started fundraising in 2014 and made its first investment in 2015. Aqua-Spark is now is just under $100 million in size and is invested in 17 companies.
How is the fund structured?
We operate like a long-term holding company in that we’re open ended and continually sell shares for expansion. We usually invest early at a Series A type stage and then follow up during subsequent funding rounds.
You’re invested in 17 companies now – how big is the pool of potential sustainable aquaculture companies?
We’re looking to add about eight investments a year getting to 24 this year, and to get to about $1.5 billion AUM by 2030 investing in 60 to 80 companies. Over the last seven years we’ve grown a core pipeline of 1400 companies across the value chain. There’s no shortage of potential investments.
What type of companies are you looking at?
They are across the globe and across species, from tech companies to feed to health to farming to distribution. Tech investments tend to have higher risk than farming. In farming with the right support and capital and team you can be a success, with tech it’s more binary – it works or it doesn’t.
Can you share any examples of companies within your holdings right now?
You can see them on our website. We have a land-based charr farm in Iceland, and an Atlantic halibut farm – they mimic nature so the feed conversion is low and the fish thrive. We have an investment in insects for aquafeed, and in a company that has created a single cell protein that is fully traceable. In shrimp farming value chains slavery is well-documented so by using this single cell based feed, the company can ensure it is not exacerbating that activity. Alternative antibiotics is another investment – antibiotics have been a large problem in aquaculture.
And how is investor demand?
We’re seeing more appetite and growing ticket sizes. As I said, we expect to be $1.5 billion in size by 2030. We currently have 140 investors from 21 countries – a little under half are from the U.S and they are mostly family offices, individuals, some corporates, some managers of NGOs or people in the seafood community – it’s a broad and eclectic mix.
Our first company is just turning profitable so that’s a great sign and will encourage other investors.