After leaving their previous positions late last year, in April 2023, Ohad Maiman, founder of The Kingfish Company, and Thue Holm, co-founder of Atlantic Sapphire, announced that they were joining forces to create an investment project without moving away from land-based. Now, Maiman tells WeAreAquaculture exclusively that AquaFounders Capital has defined its strategy and focus.
In just six months, what was initially contemplated as a venture capital firm has evolved into a project development company that goes beyond mere financial investment. AquaFounders Capital is going to focus on building two new companies: 'Farm in a Box' - a modular, standardized RAS farm concept with its own advanced operating system - and initiated a search for a land-based farm site for the development of new high-value species.
This move - which is almost an organic evolution if we take into account Maiman’s and Holm's entrepreneurial DNA – has an ultimate goal: to solve the bottlenecks holding back significant growth in land-based aquaculture.
In a previous interview coinciding with the launch of AquaFounders Capital, Ohad Maiman told WeAreAquaculture that they saw the sector's current challenges "as an optimal time to engage with land-based companies that may currently find it difficult to attract funding." This, he added, would help them "to build a strategic position towards the next cycle of major growth."
Those two main ideas have not changed; Maiman and Holm still firmly believe that land-based aquaculture is at a key moment in its growth, and they still want to be part of it. Land-based aquaculture hardware, software, and new high-value species are still the core focus of the company. What has changed, however, is the angle from which they intend to approach that goal.
"The first thought was really a more standard venture capital fund where we raise capital and then we invest in multiple companies in small stakes," Maiman acknowledges. But, he tells us now, after meeting over 50 companies that pitched them, and quite some deep discussions with investors, they realized three things that changed their minds.
"One was that we saw that we're interested in effectively everything that was a challenge when we built Kingfish or Sapphire. So, it's the hardware, the software, and the new species that makes sense for us," he explains. However, they also realized that the investor’s interest is more segmented. "We saw that we had very interested investors, but in one or two out of the three segments, yet in most cases, the investor interested in farming was not interested in hardware or vice versa."
"Another aspect was that we couldn't find so many investable cases, I have to admit, and the idea of being a minority, or even majority in multiple companies would have in many ways stretched us too thin, and not enabled us to build the companies we have in mind as the end goal," Maiman continues. "And the third part is that we realize that both me and Thue, are in our DNA entrepreneurs." All these three got them to where they are today, with a redefined focus to build two new companies from the ground up.
"With that in mind, we are preparing to fundraise for 'Farm in a box', with a business plan that will include some acquisitions of companies with unique critical hardware or software capabilities, however the guiding factor is an in-house rethinking and redesign of how RAS farms should be standardized, modularized, and pre-fabricated, to enable lower CAPEX and faster assembly, supported by a reliable operating system."
“And in parallel, we have commenced a site search with a focus on The Netherlands, Portugal, Spain and Iceland, for the development of a farming company focused on new high-value species that meet the critical trifecta- limited availability in the EU, high-value, and well suited for RAS farming," the co-founder and Managing Director of AquaFounders Capital tells WeAreAquaculture about the future of the company.
"Still the focus is on advancing the hardware, software, and new species segments of land-based aquaculture, but instead of raising funds and then investing in 20 companies, we are now developing these two new companies ourselves," he continues.
This approach indeed seems to be tailor-made for the entrepreneurial DNA of AquaFounders Capital's partners. Often referred to as a "venture studio" in the tech sector, these companies are usually formed by teams led or made up of experienced entrepreneurs like themselves and are characterized by building new companies quickly and successively- avoiding all the typical first-time mistakes thanks to their previous experience.
"We have formed the business plan for what we call the 'Farm in a Box', which is the idea of taking the land-based farm design and building process to a more mature sector stage where it shouldn't be designed from scratch every time, and it shouldn't take three years to design and build," Ohad Maiman tells WeAreAquaculture.
To achieve this, they are looking at different aspects that you can find in more mature sectors such as prefabrication and modularity, but also to address the current concerns of what he calls "more industrial investors" looking at the sector. As they see it, there's a lot of available capital for investment but what's preventing a lot of these investors from going into land-based is that they cannot get a straight answer on CAPEX, OPEX, construction time, or reliable performance of the system.
"What we're aiming to do with 'Farm in a Box' is to enable that clarity and certainty at reduced cost and faster assembly time," claims Ohad Maiman. "It's not fully inventing the wheel because it has been done in every other mature sector, but it's bringing it to the land-based sector." This system, he states, is intended "to address the specific pain points currently stalling the scale-up of the land-based aquaculture sector."
"Imagine if you ask me 'I want to do 3000 tonnes of X fish in Y location' and I could come back to you in a few days and say, 'Ok, you need 2 of our A modules plus 4 of our B modules, at X exchange rate, here is the plus/minus 10% cost, and we are ready to ship it and assemble it on site in Y months'," Ohad Maiman continues with the explanation. "These are the challenges currently preventing land-based farming from scaling up significantly."
Then, once the land-based farm project is in that place where the construction time and cost are clear, the next important aspect is the ongoing operation of the farm. AquaFounders Capital's 'Farm in a Box' system also plans a solution for that.
"An almost dummy-proof operating system is the goal," he says. "A robust integrated system that takes out the majority of human error and questions as to how to react to various scenarios. Once investors feel that these questions have a clear answer then I expect there could be another significant wave of scaling and new construction of land-based farms."
Thanks to the experience gained at The Kingfish Company and Atlantic Sapphire, both Ohad Maiman and his partner, Thue Holm, are in a privileged position not only to predict difficulties and avoid past mistakes when starting a land-based farm but also to address and mitigate investors' concerns, and potentially support the next wave of land-based farming maturity and scale.
