Food tech startup Aqua Cultured Foods has announced that it has raised $5.5 million in seed funding to bring its ultra-realistic seafood alternatives to market. The 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, along with follow-on investment from current investors Supply Change Capital, Big Idea Ventures, HPA, Aera VC, Kingfisher Family Investments, and Swiss Pampa. The round also included a strategic investment from CJ CheilJedang, a South Korea-based global food and bio company owning renowned brands such as Bibigo.
Speaking on the investment, Anne Palermo, chief executive officer, Aqua said, “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,” she added.
Proprietary fermentation methods and affordable inputs
Aqua’s primary value is its low cost of scaling and its path to price parity, thanks to proprietary fermentation methods that use relatively affordable inputs and equipment. 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’s lead investor, Stray Dog Capital is a venture capital fund, that invests in innovative, early-stage companies across the food, beverage, and biotechnology sectors that are driving a healthier, humane, and a more sustainable future. Speaking highly of Aqua’s work in the alternative seafood domain, Johnny Ream, partner, Stray Dog Capital said, “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.”
Tapping into the alternative seafood market potential
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 percent as wild fish stocks are further depleted. Globally, there is a need to focus on alternatives to seafood because, in addition to depleted fish populations, commercial fishing practices result in damage to ecosystems, plastic waste, and the “bycatch” of non-target species. Additionally, despite its health halo, fish contains microplastics, mercury, pesticides, antibiotics, dioxin, and PCBs (polychlorinated biphenyls). High in cholesterol and saturated fats, seafood, in particular finfish, is a good source of foodborne illness caused by bacteria, viruses, and parasites.
To contribute to the alternative seafood sector, Aqua 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. Unlike plant-based processed foods formulated with starches and protein isolates, Aqua’s alt-seafood retains its naturally occurring fiber, protein, and other micronutrients. The company also produces minced “seafood” fillings for applications such as dumplings, ravioli, and sushi rolls.
Aqua Cultured Foods is an innovative food technology startup developing the world’s first whole-muscle cut seafood alternatives created through microbial fermentation. Its novel technology produces a sustainable, complete protein source using only a fraction of the resources required by traditional aquaculture. As an R&D company with a focus on product commercialization, Aqua Cultured Foods occupies a unique position in the burgeoning alt-seafood market as well as within the fermentation industry.