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Aquaculture Startup Ecosystem

UPDATE: Aquaculture Startup Ecosystem Takes a Step Forward with New Accelerator

March 9, 2018

** First Published January 17, 2018. Updated March 9, 2018 to reflect Aqua-Spark Investment.

Bergen, Norway is home to a lot of big names in the seafood industry: Grieg Seafood, Leroy, Marine Harvest and Cargill to name a few. It is now also home to Hatch, an aquaculture startup accelerator launched by Carsten Krome of Alimentos Ventures.

Krome, who is a fish nutritionist and founder of early-stage investor and consultancy Alimentos, got the idea for the accelerator while working with Aqua-Spark, a dedicated aquaculture VC based in the Netherlands, and now an investor in Hatch.

“They were the first pioneering fund in aquaculture, and while I was there I saw that there was a lot of need for these sort of companies to become investment ready. When you look at industries like IT, the entrepreneurs go to business school and they know how to talk to investors. For aquaculture that just wasn’t the case,” said Krome, “I saw a lot of good ideas badly presented.”

Krome hopes Hatch will help fill some of the gaps he sees in the aquaculture startup ecosystem.

“Aqua-Spark often encounters great ideas, products, and technologies that could have benefitted from ideation phase support,” explained Mike Velings and Amy Novogratz, cofounders of Aqua-Spark in a statement. “Between Aqua-Spark and Hatch, there is a clear opportunity for a symbiotic partnership that will improve collective deal flow. We can direct smart, early-phase companies to Hatch, and as Hatch actively finds and grows early-stage startups, Aqua-Spark can absorb those that have progressed beyond accelerator. It is a holistic win for the aquaculture industry as a whole.”

Hatch will launch its first cohort of eight startups this spring. The three-month immersive program will be held in Bergen, and teams will be housed at the city’s technology transfer office Bergen Teknologioverforing (BTO). Once enrolled, each team will receive €25,000 ($30,600), along with mentoring from Hatch’s network of industry connections. Companies that Hatch deems have high potential will also have access to an additional €25,000 loan upon completion of the program.

The new accelerator program is hitting the market at a good time. The global aquaculture market is expected to reach $219.42 billion by 2022. For now, aquaculture tech is still a small segment, but it’s growing; since 2014, funding has increased 180% to reach $122.4 million, and deal activity 88% to 32 deals in 2017, according to AgFunder data.

The growth in aquaculture tech investments reflects an increasing investor appetite and widening investor base, says Monica Jain, founder of Fish 2.0, a seafood competition aimed at connecting investors with sustainable businesses in the sector.

“[Investors] are coming from all sorts of places and they bring all sorts of ideas. That’s the exciting part about aquaculture these days. A good investor not only brings money, but brings other connections. Some come from the technology side. Some come for the impact. A lot are there because it’s just a strong growth area,” said Jain. 

Jain said that what aquaculture startups still need is a good way to find appropriate testing grounds for their technology.

“Partnerships are something everyone needs in any business. In aquaculture you’re looking for a specific set-up — types of fish seasonality, technology…” said Jain.

That is something Bergen is well suited to offer. Aquaculture is a visible part of the city’s fabric. “You walk around Bergen and you don’t see Facebook or Shell in the big office buildings. You see Cargill,” Krome said. “We meet the head of global aquaculture at Cargill at the coffee machine in our office.”

But startups need more than testing grounds and connections—they need capital, and seed funding is largely missing from the aquaculture ecosystem still, says Krome. “Even when we’re [Hatch] done with the companies, it’s still too early for most VCs.” 

Nevertheless, Krome wants to see more entrepreneurs entering the space and more technologists choosing entrepreneurship to commercialize their inventions. As a new accelerator concept, Hatch has not yet attracted hundreds of other applications, but Krome calls the pipeline “decent.” 

“It could be much better,” he added. “It’s a really fast-growing, interesting space. There is plenty of IP, but the question remains: are there enough entrepreneurs?” 

Hatch applications are open until February 16 for Hatch’s first cohort, which will begin activities in April.

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