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The Shiok Meats team, with co-founders Sandhya Sriram (center-left) and Ka Yi Ling (center-right) in red. Photo credit: Shiok Meats

Aqua-Spark leads $12.6m Series A round for Singapore alt-seafood startup Shiok Meats

September 30, 2020

Singapore’s Shiok Meats has raised $12.6 million in a Series A round led by Aqua-Spark, a Netherlands-based VC firm focused on sustainable aquaculture.

The alt-protein startup is culturing ‘lab-grown’ prawn, crab, and lobster meat from isolated stem cells, with an initial focus on commercializing prawn products.

In a statement, Shiok said it will put the Series A funds towards construction of a “first-of-its-kind commercial pilot plant,” where it will culture cellular minced shrimp at scale with the aim of launching the product on the market within the next two years.

“The investors coming in this round, from all over the world, are all aligned towards one mission – sustainable, healthy, and delicious seafood for everyone,” said Shiok Meats co-founder and CEO Sandhya Sriram. “Our mission is to develop cell-based seafood and meats that are contributing towards a cleaner and healthier seafood industry and solving for the inefficiencies around global protein production.”

‘Part of the big picture’

Aqua-Spark is better known for backing companies involved in traditional aquaculture, from fish-farming operations to startups that provide tech solutions for the industry. Shiok Meats’ Series A represents the firm’s first deal in the ‘cultured seafood’ space, according to its co-founder Amy Novogratz.

“We’ve been looking into cell-based proteins focusing on seafood, assuming it will play a big role in the future of seafood,” she told AFN. “The cell-based seafood sector is really just getting started and we felt it was the right time for us to get involved in order to help influence how cell-based seafood develops, and usher it into the industry in such a way that it’s a part of the big picture rather than a separate subsector.”

Novogratz said Aqua-Spark chose Shiok over other cultured seafood startups because it’s “further along” than its counterparts and therefore should be quicker to market.

“We like that they are starting with shrimp, we like their network of investors and infrastructure of support, and we are especially excited about the strong founding team,” she added.

$50bn global market

According to Shiok, the $50 billion global market around prawn and shrimp production is highly unsustainable, with animals raised in crowded farms and treated using potentially hazardous antibiotics, chemicals, and hormones. Other problems with ‘traditional’ prawn farming and fishing include overfishing, excessive bycatch, and contamination with effluents, heavy metals, and microplastics; while mislabeling and poor traceability are other significant issues further down the value chain.

Shiok claims that ‘clean meat’ production could reduce the industry’s greenhouse gas emissions, land use, and water consumption by 96% to 99%,  while decreasing its energy consumption by 45%.

Nevertheless, it might seem that an investment in cultured seafood — which could essentially be viewed as a potential replacement for farmed or wild-caught animals — is somewhat at odds with Aqua-Spark’s wider thesis of supporting the aquaculture industry. Doesn’t Shiok Meats’ business model present competition for traditional fish and seafood farmers, and for the startups that provide them with tech and services – many of which are in Aqua-Spark’s portfolio?

Novogratz doesn’t think so.

“This is why we are getting into the space – to help influence the development and make cell-based seafood a vital part of the industry rather than a competitive subsector,” she said.

“Aquaculture already seems to compete with wild-caught seafood, which does a disservice to both sectors. The truth is we’re going to need to produce a tremendous amount of protein in the next few decades, and our best option for offsetting the demand for accessible, sustainable, healthy offerings will be to support each other.”

Novogratz added that Aqua-Spark will continue to invest in technologies that support ‘traditional’ shrimp farming and aquaculture operations.

“One of the reasons we love aquaculture is because of its diversity, and we see the future of fish and shellfish production nurturing that diversity,” she said. “With Shiok joining our portfolio ecosystem, we hope that all of our companies working on more sustainable aquaculture will find ways to work together and support each other toward our collective mission of a healthier, more sustainable future.”

Top-funded in 2019

Shiok Meats was Southeast Asia’s highest-funded startup in the ‘Innovative Food’ category last year, according to AgFunder research [disclosure: AgFunder is AFN‘s parent company]. It raised $4.6 million for its April 2019 seed round, which saw Y Combinator make its first-ever investment in a ‘clean meat’ company. Henry Soesanto, CEO of Philippines-based food manufacturer Monde Nissin — which is also the owner of consumer mycoprotein brand Quorn — also participated.

Earlier this year, Shiok banked another $3 million in bridge funding from investors including UK firms Agronomics and Impact Venture, US trust VegInvest, and UAE-based Mindshift Capital.

Joining Aqua-Spark for the Series A round were SEEDS Capital, the investment arm of government agency Enterprise Singapore; Real Tech Fund and packaging manufacturer Toyo Seikan from Japan; Irongrey and Yellowdog Empowers Fund from South Korea; Ilshin Holdings and Makana Ventures from Singapore; AiiM Partners and VegInvest from the US; and Switzerland-based Beyond Impact.

Individual investors Nicole Brodeur, Kelvin Chan Siang Lin, and Alex Payne also participated.

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