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Investors pinpoint overlooked and under-funded aquaculture opportunity

The aquaculture sector is attracting a shoal of investors keen on backing an industry that has been starved of innovation.

Investors with a keen interest in aquaculture will form a special judging panel for this year's Aquaculture Innovation Summit in London. A team of global investors will run the rule over start-ups developing products for fish health, nutrition and farming.

Gerard Chia, head of investments and portfolio management at Singapore-based New Protein Capital, will be part of the judging panel.

He said: "Aquaculture has severely lagged other livestock farming industries such as poultry and hog when it comes to innovation. It is an industry built on obsolete farming techniques, questionable trade practices and poor economics.

"Case-in-point: shrimp farming i.e. poor disease management, high mortality rates and the frivolous use of antibiotics. Aquaculture farmers today are producing near capacity yet production needs to more than double to meet global demand. Indeed, this is a sector that is ripe for major innovation and reinvention."

He said New Protein Capital is focused on companies that "provide a solution to an urgent industry problem and whose technologies can be scaled up and applied to Asia and beyond".

Also on the panel is Christian Rangen, who is chief executive and founder of X2 Labs. He stated: "I believe we are facing a structural shift from land-based to ocean-based food production. Aquaculture and game-changing aquaculture solutions will be the key enablers to this shift. I find that to be a very, very attractive investment opportunity in the coming generation."

The Aquaculture Innovation Summit is seeking emerging companies with less than £10 million ($13 million) annual sales to showcase their technologies. Applications close June 27, 2018.

The event takes place September 11-12. Animal Pharm will be in attendance.

Sarai Kemp: "We see this sector as an attractive field for investment due to its lack of technology development and implementation in the market, unlike the innovations in other agtech sectors."
Sarai Kemp, vice president of business development at Trendlines Agtech, will also be a judge at the event.

She said: "We see this sector as an attractive field for investment due to its lack of technology development and implementation in the market, unlike the innovations in other agtech sectors. Aquaculture has been overlooked in this respect by entrepreneurs and investors alike, while the demand for protein sources grows, and the regulatory limitations on wild catch increase.

"So far, Trendlines has invested in four aquaculture companies and continue our interest for new investments opportunities in this field."

Tom Prins, deal-flow manager at Aqua-Spark, added: "We're interested in aquaculture as the industry holds the potential to reverse the tide on our overfished oceans whilst at the same time positively impact the livelihoods of millions around the planet. Our mission therefore is moving the aquaculture industry towards healthier, sustainable and affordable production of seafood with strong financial returns."

Jamie Stein, partner at Devonian Capital, said: "We see a tremendous macro opportunity based on both demand-side factors (growing population and increased protein consumption) and supply-side factors (challenges with wild catch and conventional aquaculture). At the same time, the evolution of technologies and increased experience of replenishment-at-sea (RAS) operations means projects that are well conceived and well implemented have an excellent chance of success.

"Finally, we observe that very little capital is currently comfortable with the risks involved in large-scale RAS projects, and we believe this gives a great opportunity to capital that is able to carefully assess the true (rather than perceived) risks of these opportunities.

"We are looking to invest in the early stages of companies which we believe will enjoy sustainable competitive advantage from exceptional operating know-how, scientific knowledge and technical expertise. We seek to support projects which have competitive production costs, and which seek to capture their 'sustainability premium' in market share terms rather than in price terms. We are patient, long-term investors and seek to achieve significant money multiples for our investors over the investment period."

The other judges on the panel are: Maarten Goossens, principal at Anterra Capital; Michael O'Neill, director of Wheatsheaf Group; Carsten Krome, founder of Alimentos Ventures; James Mead, principal of 8c Capital; Alexandra McOran-Campbell, partner at Impact Capital; and Andrew Beebe, managing director of Obvious Ventures.

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