Aqua Cultured Foods has raised $5.5 million in seed funding to bring its ultra-realistic seafood alternatives to market.
The round was led by alt-protein fund Stray Dog Capital, and other participating investors included H Venture Partners, Aztec Capital Management Amplifica Capital. In addition, existing investors Supply Change Capital, Big Idea Ventures, HPA, Aera VC, Kingfisher Family Investments, and Swiss Pampa also participated. Notable among them was a strategic investment from CJ CheilJedang, a global food and bio company out of South Korea. This brings Aqua’s total funding to $7.6m.
Aqua plans to use the investment to equip its new facility, scale up production, launch new products, add key talent, and expand its roster of restaurants and foodservice outlets for product introductions this year.
The company's CEO, Anne Palermo, expressed gratitude for having strategic partners that align with the company's mission. As a result of government programs, academic resources, and other advantages, they will be able to get to market quickly by building up their business and brand and hitting their milestones sooner than expected.
Using proprietary fermentation methods that use relatively affordable inputs and equipment, Aqua's primary value is its low cost of scaling and path to price parity. The company recently acquired a food-grade facility that was already built out nearly to its requirements—saving it over a million dollars on construction.
Over the next ten years, Aqua will save hundreds of thousands of dollars in taxes through the Illinois Office of Business Development's EDGE program.
“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,” said Johnny Ream, Partner at Stray Dog Capital. “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.”
The global plant-based seafood market was worth $42.1 million in 2021, with projections indicating it will hit nearly $1.3 billion by 2031 at a CAGR of 42+ percent - a result of diminishing wild fish stocks. Moreover, the impacts of commercial fishing are severe; it leads to habitat destruction, pollution, wastage of plastic, and unintended capture of other animals. Furthermore, aquaculture increases the problems mentioned before and also increases reliance on antibiotics and other marine species for feed.
Despite its healthy image, fish contains microplastics, mercury, pesticides, antibiotics, dioxin, and PCBs. Rich in cholesterol and saturated fats, seafood, especially finfish, is a source of bacteria, viruses, and parasites.
With its proprietary mycoprotein fermentation process, Aqua develops calamari, shrimp, scallops, tuna and whitefish filets without animal inputs, genetic modification, or genetic alteration. Aqua's alt-seafood retains fiber, protein, and other micronutrients that are naturally present in plant-based processed foods formulated with starches and protein isolates. The company also produces minced "seafood" fillings for applications such as dumplings, ravioli, and sushi rolls.