Full stack aquaculture platform Aquaconnect is eyeing the shrimp markets in the European Union and the US, while it has come up with a project called “Fish Tank” to provide access to innovators on its platform.
Fresh from raising a $4 million pre-series B round funding led by S2G Ventures, Aquaconnect founder and Chief Executive officer Rajmanohar Somasundaram told businessline in an online interaction that the company, floated in 2017, exported $8 million-worth seafood, largely shrimp to Vietnam, China and Japan.
Now, as part of expanding its post-harvest linkage, the startup is looking at new marketing opportunities in the US, the largest importer of shrimp, and the EU, a high premium buyer. “That’s where our focus on post-harvest value chain will be,” he said.
While Aquaconnect will look to use the proceeds of the new funding to expand its aqua partners’ network, it is looking at biotechnological innovations on the input side of the business.
Abysmal awareness
“A lot of innovations are happening led by Israeli and Singapore companies. These are typical research and development efforts in biotechnology. The awareness of the industry and opportunity is abysmal. Our idea is in partnership with the Government to encourage early stage innovators to come into our value chain and formulations such as novel shrimp vaccine or Internet of Things (IoT) devices,” said Somasundaram.
Aquaconnect would like to act as a platform to provide access to all these innovators. This will help farmers get the latest innovations. “We want to become an enabler and do the heavy lifting so that innovators can stand on top of our shoulders,” he said.
One of the features of Aquaconnect’s latest round of funding is that US-based venture capital fund S2G Ventures has invested for the first time in India and in Aquaconnect.
Kate Danaher, Managing Director at S2G Ventures, said the venture capital firm looked at India as its protein production could not be ignored. “India has good domestic consumption of seafood products and 75 per cent of them come from aquaculture. It is the second-largest export market for shrimp. If we have to work, we need to work in India, she said.
Investors on board
One reason for looking at Aquaconnect was that it had set the bar high and cleared several hurdles before getting the investment. The Chennai-based full-stack platform has on board other well-known investors such as Omnivore, Louis Dreyfuss Company Ventures and Flourish Ventures and it was another reason for S2G to invest.
The Aquaconnect CEO and founder said the company has so far raised ₹265 crore. “We work as a full-stack comprehensive aquaculture platform providing solutions to multiple stakeholders in the value chain. We are in touch with farmers through our network of aqua partners who are our last mile connectors to reach out to fish and shrimp farmers,” he said.
Aquaconnect is present in Tamil Nadu, Andhra Pradesh, Gujarat, Odisha, West Bengal, Uttar Pradesh and Assam. The last three States were covered last year. The company recently signed a memorandum of understanding (MoU) with Tamil Nadu to promote aquaculture start ups.
“We have large networks of aqua partners to take the product to the market and help access it. We are focussing on the growth of aqua partners and looking at engagement of more farmers in the aquaculture biotechnology space,” said Somasundaram.
Entrepreneur-led model
The aqua partners model is a village-level entrepreneur-led model, which the startup sees as its “flywheel” for growth. “If one partner works with 30-40 farmers, there has been a 4X growth in revenue and in a sustainable way. The model is gaining. In 2021, when we started this we had four partners. It has now crossed 620 across major aquaculture-producing States,” said the Aquaconnect CEO and founder.
The company is gaining traction among buyers as it enables traceability of shrimps, besides meeting other high-quality parameters. “We provide complete traceability of our shrimp products. It is a major differentiation for us,” Somasundaram said.
The other feature is that Aquaconnect is making available “supply chain finance” or bill discounting. It is making credit available partnering with its input retails on the one side and processors on the other. “The credit is routed through our partners, who are provided working capital. This, in turn, is provided to farmers to buy innovative aquaculture products from the company,” he said.
Again, shrimp farmers insist on same day payment. “So, we purchase the produce from farmers and pay the same day. The produce is passed on to processors. These facilities enable farmers to do business better and get good prices,” the company’s founder and CEO said.
Impressive Indian market
S2G’s Danaher said the model of “unlocking credit” has worked well in the agtech sector in India besides other countries. She said now that the US-based venture capital has made its first investment, it hopes to make more investments as part of its “Ocean Strategy” provided the firms clear a lot of things and “set the bar high” in their field.
S2G invests 30 per cent of its funds in Oceans Strategy, including globally, and this will continue. “The Indian market is impressive and we see the ability from the size of the market to disrupt. The supply chain is not efficient and we see a big opportunity in that. We can make a sustainably huge impact and good financial returns,” she said.
Though there are opportunities from Europe to India to Singapore, where S2G will continue investing, it finds South-East Asia, particularly India and Indonesia, where the scale of disruptions can be huge.
The US -based venture firm has also invested in a firm involved in coming up with a RNA solution for white spot disease in shrimp. “We also look at decarbonisation of ocean-bound industries such as shipping and fishing, ocean intelligence using satellites and drones to under the ocean better,” Danaher said.