Aqua Cultured Foods announced it has raised $5.5 million in seed funding to bring its ultra-realistic seafood alternatives to market. This funding round was led by Stray Dog Capital, a venture capital fund specializing in alternative protein investments, with participation from H Venture Partners, Aztec Capital Management, and Amplifica Capital, and with follow-on investment from current investors Supply Change Capital, Big Idea Ventures, HPA, Aera VC, Kingfisher Family Investments, and Swiss Pampa.
The funding round also included a strategic investment from CJ CheilJedang, a South Korea-based global food and bio company owning renowned brands such as Bibigo. And Aqua will use the funding round to equip its new facility, scale up production, bring products to market, add key talent, and expand its roster of restaurant and food service outlets for product introductions this year.
Aqua’s primary value is its low cost of scaling and its path to price parity due to proprietary fermentation methods that use relatively affordable inputs and equipment. And the company recently acquired a food-grade facility that was already built out nearly to its requirements — which it estimates will save more than a million dollars in construction costs.
Aqua was recently accepted into the Illinois Office of Business Development’s EDGE program which provides tax incentives to growing companies and will save hundreds of thousands of dollars in taxes over the next 10 years.
Despite the health halo, fish contains microplastics, mercury, pesticides, antibiotics, dioxin and PCBs. And high in cholesterol and saturated fats, seafood, in particular, finfish is a good source of foodborne illness caused by bacteria, viruses, and parasites.
Aqua Cultured Foods is developing calamari, shrimp, scallops, and filets of tuna and whitefish with proprietary mycoprotein fermentation processes that do not use any animal inputs, genetic altering or modification. And unlike plant-based processed foods formulated with starches and protein isolates, Aqua Cultured Foods’ alt-seafood retains its naturally occurring fiber, protein, and other micronutrients. Plus the company also produces minced “seafood” fillings for applications such as dumplings, ravioli, and sushi rolls.
Total addressable market: The global plant-based seafood market was valued at $42.1 million in 2021 and is projected to reach $1.3 billion by 2031 with a CAGR of more than 42% as wild fish stocks are further depleted. Along with depleted fish populations, commercial fishing practices result in damage to ecosystems, plastic waste, and the “bycatch” of non-target species. And as fish farming increases, so does habitat destruction, pollution, and diseases spread to wild fish and the industry’s reliance on antibiotics and wild-caught fish for feed.
KEY QUOTES:
“We appreciate having mission-aligned partners that offer strong strategic value for the next phase of our growth, which will involve building up the business and brand. Being good stewards of investor capital is important to us, so along with hitting milestones earlier than expected, we are benefiting from government programs, academic resources, and other advantages to get to market quickly.”
— Anne Palermo, CEO of Aqua
“The adage is true that early-stage funds heavily weight investment conviction in people, and less in technologies or products given the embryonic nature of companies at these stages, but Aqua already boasts strength across its team, product, and key partnerships already in place. We are interested in backing founding teams leveraging unique technologies and approaches that drive a more sustainable future; the work Aqua is doing with alt-seafood has immense potential to drive both human and planetary benefits in a massive $100B+ global market.”
— Johnny Ream, Partner at Stray Dog Capital
