Victory Farma tilapia aquaculture startup and farm that includes hatcheries, nursery ponds and deep-water cages, has raised $5 million in new funding.
The investment was led by Ed Brakeman, senior managing director of Bain Capital, and Hans den Bieman, founder and former CEO of Mowi, one of the world’s largest salmon businesses.
This is the startup’s first institutional investment after seven internal angel rounds from the same group of equity and debt investors (it raised $40 million debt last year). The funding will allow the Kenya-based company to expand into Rwanda, the Democratic Republic of Congo and Tanzania.
Joseph Lehman Founded Victory Farms in 2015. In a call with TechCrunch, Rehmann recounted his journey to founding the company. After completing his MBA, he started a three-month aquaculture project in Ghana, culminating in a three-year position as CFO of Accra Farms.
“I learned a lot about scale in aquaculture and all of that. I believe the platform I’m running can be bigger and scale faster if we can connect more dots – basically creating an end-to-end Protein factories,” said Rehmann, who worked at an investment bank and Microsoft.
In 2015, Lehman collaborated with his long-term business partner Steve Moran Explore Lake Victoria and do some feasibility studies on how they could use technology to disrupt the country’s cold chain market.
They concluded that there is a unique opportunity to rebuild the fish value chain from scratch. Before launching in mid-2016, they raised an angel round to launch Victory Farms to serve a market with a fish shortage of about $1.5 billion.
Ordinary Kenyans only Consume about 10-20% Animal protein intake, most of which is red meat. Retail prices hit $5 a kilo due to a shortage of fish, Victory Farm says it uses technology to produce more fish while serving the thousands of market women who buy fish in small batches to cook and sell at local food markets reduce costs.
“We run a technology-enabled platform and scale 2x faster than any other African fish company. By using data, we have built the most efficient operation in the world at half the capital expenditure of current global leaders,” Rehmann told via email TechCrunch. “We sell to the African mass market through a highly innovative RTM cold chain that uses forecast data to push fish to thousands of market ladies across Kenya every day with a corruption rate of less than 1%.”
The company has more than 54 retail locations where more than 15,000 market women go to buy fish and, according to Rehmann, do not use electricity or ice.
“We use vertical integration to drive more robust end-to-end datasets,” he said. “This allows us to innovate and create more cost-effective solutions through the power of our systems and data to deliver better, fresher products to more consumers.”
Victory Farms claims to have one of the most profitable structures in the global fishery thanks to its technology. The company is growing at a CAGR of 130% between 2017 and 2021. Maintaining this growth rate exudes the greatest confidence. In the case of Victory Farms, Rehmann believes the company has no significant competitors in Kenya and the greater East Africa region – the company also has a processing plant and distribution network.
“We’re growing so much faster than they (competitors) that we don’t see it as a competitive playing field. Our real competitor is starving and unaffordable protein options for consumers,” he said. .
But from a global perspective, Rehmaan touted Zurich-based Regal Springs as a bigger player. However, the CEO believes that if Victory Farms’ expansion into new regions takes off as planned, Victory Farms could overtake Regal Springs as the world’s “largest end-to-end tilapia platform” within the next five years.
Although Victory Farms is profit- and growth-oriented, Rehmann said it is worth highlighting that the company is striving to be the most sustainable tilapia platform in the world. “We are working on a number of initiatives and plan to build the world’s first carbon-negative fish platform. I think it’s very exciting because we’ve built so many tangible and measurable dimensions into our business to make that happen.”