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Aqua-Spark’s $10m fund makes first investments

The open-ended sustainable aquaculture fund has invested $4m into a US biotech company and a tilapia producer in Mozambique.

Aqua-Spark, a $10 million open-ended sustainable aquaculture fund, has made its first two investments totalling $4 million.

The first, Calysta, is a US biotechnology company cultivating an alternative source of fish feed and the other is Chicoa Fish Farm, a tilapia producer in Mozambique.

Aqua-Spark closed its first round of fundraising on $10 million at the end of 2014 after getting commitments from 35 investors including one Dutch institutional investor. The remainder are high net worth individuals spanning eight countries – Belgium, Germany, the Netherlands, Jordan, Portugal, United Kingdom, United States and Venezuela, according to Mike Velings, the chief executive.

The fund is targeting $10 million every six months and hopes to have raised between $250 million and $400 million in 10 years’ time.

Both investments stand to transform the industry, according to Velings. “We have a really strong sustainability and social core which at the same time is also very commercially-focused,” he told Agri Investor.

“Calysta is a producer of microbial protein that is a great alternative to fish meal; alternatives are normally very expensive and hard to get but we believe this a real game changer both nutritionally and economically. And it’s endorsed by the World Wildlife Fund,” he added.

Chicoa is part of a larger African strategy to help produce more affordable fish in the region. In sub-Saharan Africa there is a 1.6 million tonne affordable fish shortage, according to Velings.

“We want to invest in multiple fish farms across sub-Saharan Africa and connect the dots to help support best practices and risk mitigation. Access to fingerlings and great feed is a big problem in Africa, which is why we are so excited about Chicoa building an integrated feed mill and hatchery.”

Velings expects to deploy the full $10 million before July from a hotlist of 20 potential small and medium-sized companies from a larger pipeline of 400. He is currently fundraising for the next $10 million.

“Aquaculture is still way off from being an active space for investment although momentum is growing,” he said. “When we started this, we were the only ones on the planet doing this in a dedicated manner. It is a sector that can get very risky very quickly if people do not know what they are doing. But we do expect a lot more activity in the space in the future.”