The risks of disease outbreaks and production inconsistency are two of the key deterrents to investment, according to Piers Lakin, a fund manager at Ocean 14 Capital. While his fund has invested in a shrimp genetics company, SyAqua, they have been less willing to invest in shrimp producers themselves.
“Production in the shrimp industry was a difficult place for us to invest due to fragmentation and the volatility and the commoditised nature that you had to deal with at the production level,” he explained.
The fund has also invested in Aqua Exchange.
“We decided to focus on technologies which could combine together to really drive value in the industry, both in terms of sustainability, but really resource efficiency, longevity and stability,” he said.
From a banking perspective, disease mitigation is the defining challenge.
As Jeroen van der Staay, executive director of Rabo Ventures, emphasised: “The main issue with shrimp particularly is disease, much more so than any of the other species that are being grown at scale.”
As a result, Rabobank chose to back ViAqua, which is developing an RNA-based feed to combat viral infections in shrimp. Though the bet was considered high risk, van der Staay admitted, the potential impact justified it.
“Because of the potential impact it could have on the industry…Rabobank did decide to take basically a chance on this company,” he said.
Both Rabobank and Ocean 14 Capital highlighted a central issue: farming risk is simply higher in shrimp compared to other aquaculture species. While they both invested in the Kingfish Company, they said that land-based kingfish farms, while expensive, offer higher-value products and clearer paths to market. Shrimp farms, in contrast, struggle to deliver the industrial scale and predictability that institutional investors require.
As Marcel Smits, director of SF Investment Management Company summarised, “The problem, of course, with disease is that it makes it unstable…for VC and especially for PE, it’s very hard.”
Beyond solving disease and volatility, Smits pointed to the long-term opportunity presented by the differentiation of shrimp products, and the possibility of moving away from commodity shrimp production.
“What I’m quite passionate about is premiumisation of the top end of the market… a premium segment is small in volume, it’s bigger in value, it is much bigger in share of voice and it leads the education of the consumer,” he noted.
According to Smits, a growing emphasis by key shrimp producers on sustainability and transparency could help shrimp replicate the trajectory of cage-free eggs, where a premium offering eventually transformed mainstream markets.
