Victory Farms, an aquaculture startup and farm for tilapia fish comprising hatcheries, nursery ponds and deep-water cages, has raised $5 million in new funding.
The funding was led by Ed Brakeman, a senior managing director at Bain Capital and Hans den Bieman, founder and ex-CEO of Mowi, one of many largest salmon companies globally.
It’s the startup’s first institutional funding following seven inner angel rounds from the identical set of fairness–and debt traders (it raised $4 million in debt final yr). This funding will permit the Kenyan-based firm to broaden its enterprise into Rwanda, DRC and Tanzania.
Joseph Rehmann based Victory Farms in 2015. On a name with TechCrunch, Rehmann narrated his journey to beginning the corporate. After finishing his MBA program, he started working on a three-month aquacultural venture in Ghana, which finally led to a three-year position the place he grew to become CFO of an Accra-based farm.
“I learnt lots about aquaculture scaling and all that. I believed the platform I used to be operating may very well be lots greater and scale lots sooner if we might join extra dots — and principally creating an finish to finish protein plant,” mentioned Rehmann, who has labored for an funding financial institution and Microsoft.
In 2015, Rehmann teamed up together with his longtime enterprise associate Steve Moran to discover Lake Victoria and carry out some feasibility research on how they may use expertise to disrupt the nation’s chilly chain markets.
They concluded {that a} distinctive alternative to rebuild the fish worth chain from scratch existed. They raised an angel spherical to begin Victory Farms earlier than launching in mid-2016 to serve a market with a couple of $1.5 billion fish deficit.
The typical Kenyan solely consumes about 10-20% of animal protein consumption, most of which is purple meat. With a big fish deficit and retail costs reaching $5 per kilo, Victory Farm says it makes use of expertise to provide extra fish and drive down prices concurrently for the hundreds of market girls who purchase fish in small batches to prepare dinner and promote in native meals markets.
“We run a tech-enabled platform and have scaled 2x sooner than some other African fish firm. And utilizing information, we’ve got constructed probably the most environment friendly operation globally at half the capex of present international chief,” Rehmann instructed TechCrunch through e-mail. “We promote to mass market Africans through a excessive revolutionary RTM chilly chain which makes use of predictive information to push fish to hundreds of market women each day all throughout Kenya with lower than 1% spoilage.”
The corporate has greater than 54 retail areas the place over 15,000 market girls go to purchase fish, and based on Rehmann, they use no electrical energy nor ice.
“We use vertical integration to drive a extra strong information set from finish to finish,” he mentioned. “This permits us to innovate and create less expensive options via our methods and the ability of knowledge to ship a greater, more energizing product to extra customers.”
Victory Farms claims to have one of many highest margin constructions within the fishing business globally as a result of its expertise. The corporate recorded a 130% CAGR between 2017 to 2021. Sustaining this progress charge can exude utmost confidence. In Victory Farms’ case, Rehmann believes there are not any important rivals to the corporate — which additionally has a processing plant and distribution community — in Kenya and the bigger East African area.
“We’re rising a lot sooner than them (the competitors) that we don’t see this as a aggressive enjoying discipline. The true competitor for us is starvation and customers not having the ability to have an inexpensive protein possibility,” he mentioned.
However from a world perspective, Rehmaan touts Zurich-based Regal Springs as an even bigger participant. Nevertheless, Victory Farms might surpass Regal Springs within the subsequent 5 years to turn into “the most important end-to-end tilapia platform” globally if its enlargement into new geographies takes off as deliberate, the CEO argued.
As a lot as Victory Farms is revenue and growth-oriented, Rehmann mentioned it’s price highlighting that the corporate is working towards turning into the world’s most sustainable tilapia platform. “We’ve acquired a number of initiatives underway and deliberate to construct the world’s first carbon unfavorable fish platform. And I feel it’s very thrilling as a result of we’ve acquired lots of tangible and measurable dimensions constructed into the enterprise to attain that.”
Replace: Correction was made on the subject of Victory Farms’ debt funding final yr. It was $4 million not $40 million.
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