Farmed tilapia “can and should play an important role in solving Africa’s challenge to produce sufficient food for its growing population.” The founders of Aqua-Spark, the aquaculture-focused impact investing firm, five years ago laid out their thesis for an investment strategy in Africa in a 90-page report on tilapia farming. They’ve now secured $48 million in anchor funding, which they hope to build up to $250 million to invest in Africa’s farmed fish value-chain over the next decade.
“The sector is moving from ‘this should work’ to ‘this is working’ – now it is time to help scale this up,” Aqua-Spark’s Ben Gimson told ImpactAlpha. “We feel the opportunity in Africa is enormous.”
The Netherlands-based team, helmed by founders Amy Novogratz and Mike Velings, have played an important role in building the investment case for more efficient, humane and sustainable fish farming to meet the protein and nutrition needs of a growing global population. For Africa, the fastest growing continent, that may mean tilapia, the hardy, fast-growing freshwater fish known as “aquatic chicken.” Aqua-Spark’s strategy for its open-ended fund is to nurture the tilapia value chain, from infrastructure, to farmer technologies and services, to inputs, to distribution, to export.
“To really do it justice, we decided to set up a dedicated fund, while retaining appropriate investment structures that we have developed from our global work,” said Gimson.
Aqua-Spark will blend that global experience with localized research and development, and work with co-investors and nonprofits to link companies in Africa into its broader portfolio and networks.
Anchor LPs
The firm’s first investors for the fund include the EU’s Agriculture Financing Initiative, AgriFi, German development bank KfW, and the Livelihood Impact Fund. Gatsby Africa, the private foundation of the family behind UK supermarket chain Sainsbury’s — and Gimson’s former employer — also invested.
Aqua-Spark will write equity checks of $250,000 and to $5 million and provide technical assistance through its philanthropic arm. Two prior investments, Mozambique-based Chicoa Fish Farm and Madagascar-based Indian Ocean Trepang, have been transferred from its global fund to the Africa fund, Gimson said.
Investor interest
Aqua-Spark weathered a significant setback last year when nearly half of its global assets under management were wiped out because of one portfolio failure. Indonesia-based eFishery folded following fraud allegations. Gimson said the firm had pushed ahead in conversations with potential LPs about its Africa strategy.
“We’ve found that most investors quickly move past the headline and focus on the broader evolution of the aquaculture sector. If anything, moments like this tend to sharpen the conversation around fundamentals.”
