[Disclosure: AFN’s parent company AgFunder is an investor in Tepbac.]
- Vietnam-based Tepbac has raised a $2.25 million pre-Series A round.
- Tepbac makes an IoT-enabled hardware and data system for shrimp farmers, and also runs an aquaculture media platform.
- Aqua-Spark, AgFunder and Son-Tech Investment participated in the round.
- Tepbac will use the funding to scale its suite of technologies to help farmers simplify shrimping operations, save costs and improve decision making.
‘We want to reduce risk for farmers’
Vietnam is one of the top five shrimp producers globally, with exports growing 11% year-over-year to hit $4.3 billion in 2022, according to the Vietnamese Association of Seafood Producers and Exporters (VASEP). The country plans to triple production in the future, according to Tepbac.
But shrimp farmers are susceptible to climate change, the rising costs of shrimp production, over-reliance on human labor and lack of apt farm management solutions, according to Lam Nguyen, co-founder of Tepbac. Shrimp farming also contributes greatly to environmental pollution due to unsustainable farming practices.
None of these problems were new to Nguyen and his co-founder Tran Duy Phong, both sons of shrimp farmers, when they started.
“We want to reduce risk for farmers and increase their success rates,” he says.
From media platform to farm management
While it’s not the only shrimp farm management platform in Vietnam, Nguyen says Tepbac’s big differentiator is its focus on the farmer.
“Other players in the market solely focus on the input part and the output part. For example, they have platforms to sell feed or buy shrimp from farmers and sell it. They don’t focus on the farmer,’ he says.
Tepbac began life as an aquaculture media platform in 2012; it’s now a leading aquaculture knowledge platform that includes the latest news on the aquaculture industry, seafood prices and a library of information to help farmers.
In 2017, the company launched Farmext, a technology platform including hardware and software deployed across Vietnam’s aquaculture supply chain to help farmers reduce risks associated with shrimp farming. The system includes a remote-controlled auto feeder, a water quality monitoring device and software that helps farmers track farm data and automate their operations to save on labor and energy costs.
Tepbac also claims to have cheaper options compared to its counterparts, and its solutions can be used not just for shrimp but for other marine fish as well. Additionally, farmers can keep a ‘farming diary’ to track data on feed and other elements; Tepbac’s software analyzes this data to estimate operational costs and expected profit.
The company says it has already reduced farmers’ costs by 20% and increased profits by 30%.
For example, farmers must typically run aeration systems for around 20 hours per day to ensure the shrimp are getting enough oxygen. This translates to higher energy costs.
Tepbac’s water quality monitoring solution addresses this by monitoring oxygen levels every five minutes, automatically turning aeration systems on and off as needed.
“This can save about 30% of electrical fees for a farm,” Nguyen says.
1,500 farms and counting
Tepbac has to date served about 1,500 farms; clientele ranges from small- and large-scale farmers to shrimp processing plants to the government.
It was among the 10 startups selected for AgFunder’s GROW Impact Accelerator 2022 cohort.
“Since our initial investment into Tepbac via the AgFunder GROW Impact Accelerator, we have been impressed with the waves that Tepbac has been making in Vietnam’s shrimp farming industry,” Angela Tay, senior investment associate, AgFunder Asia, said in a statement.
Tepbac’s combination of media platform, e-commerce platform and suite of software and IoT devices “positions them well to become the leader in a blue ocean market,” she added.
“With Vietnam’s focus on increasing sustainable production of aquaculture and the limited number of aquatech companies currently serving the Vietnamese, Tepbac is uniquely positioned to digitize aquaculture while solving pain points along the way,” added Lissy Smit, CEO of Aqua-Spark. “Tepbac’s platform captured our attention because it has incredible potential to improve market access for small farmers and enable more sustainable practices, all while growing and protecting one of the largest shrimp markets in the world.”