These were some of the key points discussed during yesterday’s investment panel at the Blue Food innovation Summit in London.
The panel featured a selection of investors: Maria Velkova, chief portfolio officer at Aqua-Spark; Alan Liu, vice-president of Novo Holdings; Jeroen van der Staay, executive director at Rabo Ventures; Claire Pribula, managing director and co-founder of The Yield Lab Asia-Pacific; and Nadir Ait-Laoussine, vice-president, platforms and programs, Sea Ahead.
According to Pribula, who is based in Singapore, the eFishery debacle caused several investment rounds to reduce significantly in the region, while valuations of startups have also decreased.
“It’s an anomaly that happened in the region, but it did change some of the dynamics of venture capital and innovation in regards to the types of rounds that are being raised. They halved or, in some cases, quartered in size and their valuations have come down,” she reflected.
However, Velkova, while the most directly affected by the collapse of eFishery – given that it had been the biggest success story in Aqua-Spark’s portfolio – was keen to put it in perspective.
“I think we forget that these kind of things happen in every other industry. I don't ever want to say this is normal, because I don't think it is. But at the same time I think we are much more resilient than just thinking that one company that failed is going to have a massive impact. I can imagine how this can be used by sceptics to say ‘I told you so’. [But] I completely disagree with this. I think we have a lot of amazing examples [of startups] that can rectify this and show that there is much more there,” she reflected.
“It's very, very unfortunate. It's very emotional as well because I think we were all looking up to a success. At the same time I think again in the pipeline we have so many other companies that are getting there,” she added.
Velkova also emphasised the importance of patient capital in the aquaculture space, noting that changing the industry requires time and cannot be achieved with traditional investment structures.
“[But] if you have a longer investment horizon and if you have a little bit of a bigger idea in your head around creating synergies, around creating a certain balanced portfolio, maybe short term fluctuations are a little bit less scary. I mean it's disrupting and it's not pleasant and again it creates stress and people become more risk-averse. But I think the structure that you as an investor have in the horizon you have plays a big role in this kind of short term shocks. And that's why I think for innovation, investors have to have it in their head that you can't be a two, three year flipper because then it's just not going to work,” she explained..
It was a sentiment echoed by van der Staay, who noted that it would be flawed for anyone to build an investment thesis based around one company achieving unicorn status, especially in aquaculture, which is very impact-related.
“I'm relatively unfazed by what happened personally and it may be that other people think the industry is a little less further ahead than they thought it was, but underlying [it] there's a momentum building of companies that are growing in a different pace, perhaps, but moving forward,” he explained.
However, he agreed that the incident was not likely to helping startup valuations and exits.
“You see the pressure on valuations because of that, but also it limits the ability for us to sell these companies to next stage investors, because less investors are interested in that space because of this,” he noted.
Tariff concerns
Meanwhile all panellists were nervous about the impact of the recent US tariffs, as highlighted by Liu.
“I think the current trade environment and tariffs that certainly make our work more complicated. It has also increased the bar that the investment needs to meet in order to convince ourselves that this will be a good investment in the next few years. So I would say the current trade environment and tariffs will likely slow down the growth outlook of the global economy,” he explained.
“But in the meantime it also highlights the importance of focusing on efficiency, resiliency and also sustainability of the investment that we look at. I think that is also generally in line with the overall trend in the aquaculture industry where the thesis has shifted from simply creating scales to enhancing efficiency, resiliency and sustainability. So we definitely are still very excited about opportunities that can improve efficiency. And also in the other areas that I mentioned, for example in biosecurity, in breeding and environmental footprint, these opportunities continue to excite us a lot,” he added.
Equally, the fluid nature of the tariff situation was something that the panel were keen to highlight.
“I think it also depends on the belief that you have that these tariffs will be in place for a very long time or not so much. Personally, I'm not yet convinced that Trump has the stamina to basically continue this for a long period of time,” noted van der Staay.
Meanwhile Ait-Laoussine discussed changes in public funding in the US, noting that startups are pivoting to private capital sources, leading to increased pressure on startups to demonstrate differentiation and traction. There's also an increase in conversations with large corporates entering the space.
“A lot of startups that we work with depend on non-diluted funding from the federal government. And when that goes away, they immediately pivot to private sources of capital,” he reflected.
Despite many concerns the session was rounded off by each panellist highlighting positive developments in the sector. Liu pointed to advances in health tech and genetics; Ait-Laoussine to the increased activity in ocean data space; van der Staay the progress in disease management and adoption of alternative feed ingredients; Pribula the growth in seaweed innovation and strategic investments; and Velkova the maturing market for various technologies like AI and alternative feed ingredients.
