TalentView: Ohad Maiman

"I'm having fun." That's what Ohad Maiman tells us at one point in the interview, near the end of our chat. The founder and former CEO of The Kingfish Company seems to be having the time of his life with this new adventure he has embarked on with Thue Holm. Both are co-founders and managing partners of AquaFounders Capital, a company initially contemplated as a venture capital firm that in a few months has decided to focus on something much more exciting for both: building two new companies.

When his passion for land-based aquaculture started, Ohad had "this feeling that it was the right solution at the right time for a significant problem." This vocational entrepreneur has already demonstrated that it is possible to raise fish in a RAS facility, now, he says, it is time to mature the sector and, above all, make it scalable and profitable. Ohad Maiman is back on the starting grid, exactly where he likes to be more.

A first-mover position in the sector

The first time he learned about land-based aquaculture was about 10 years ago. It was 2013 and Ohad was Vice President of Business Development at an Israeli investment and project development company that was active in quite a wide array of sectors, from petrochemical to infrastructure to agro-industry. In that position, he explains to WeAreAquaculture, in a few years you end up going through many different sectors, most of them already quite established.

These were mature sectors with more or less established rates. If you needed to build a road, there was an average price per kilometer. If you needed to build a greenhouse, there was a rate per hectare plus/minus 10%. But what about land-based aquaculture? "What fascinated me with the land-based was that it was still in the proof-of-concept stage," he tells us. "When I asked some of the suppliers early on about CAPEX per kilo, the honest ones told me: 'you're going to have to design it and then build it, and then you tell us eventually how much it was'."

What would have turned many other investors off was what triggered Ohad Maiman's interest. "I found it fascinating because it was that early on in a way, which meant in my mind that, if you can build it and build it right, then you can achieve a first-mover position in this sector, where that was not the case in the more mature sectors I got to know." That fascination was half of what prompted him to start his venture into land-based aquaculture. The rest came from learning about the supply bottleneck of seafood.

"When I just started, it was already clear by looking at the global supply of wild catch that more fish will not come from the sea," he says. "And then you had that second line of aquaculture, which doubled global supply in 30 years. But my thinking at that time was that traditional aquaculture will also at some point hit a wall and flat line because of a finite availability of optimal sites and mounting operational and environmental challenges. When I asked people about how difficult it is to get a permit in Europe or North America to do net pen aquaculture, I understood that it is unlikely that it will double in the next 30 years again."

And then he learned about the idea of land-based technology. "The outlook in 2013 was pretty depressing," Ohad now recalls. "There were only a few farms of low 100's of tons, and all of them had problems, but the logic of the system made sense to me, and I thought that if we can build a reliable life support system for humans in spaceships or submarines, then we should be able to build a life support system for fish. So, it was this feeling that it was the right solution at the right time for a significant problem."

Time for the second stage in land-based

Was there anything else that prompted him to embark on this land-based aquaculture adventure? "Probably being stubborn, a bit younger, and a bit naïve because I didn't know what I didn't know yet," he smiles. The entrepreneurial DNA prevailed ten years ago, but would he repeat it? "I've already learned a lot of lessons, so I'm hoping to avoid some of the mistakes or challenges, but now I'm even more convinced," he tells WeAreAquaculture.

"Back in, ten years ago, the biggest question was if it could be done, and there were a lot of people that thought it couldn't. There was this famous quote from the CEO of Marine Harvest that said that growing fish on land makes as much sense as growing pigs in the sea," he remembers. Time has proven right to those who believed otherwise. It has been demonstrated that growing fish on land till harvest size is possible. "Where we are today is that interesting second stage of a new technology, where the first one is just making it work, and the second one is to reach scale and profitability."

In his view, land-based is now, to compare it to Tesla, in those early production-hell days of Model 3, where now that we know it works, the next challenge is to get back to the technology, the design, the procedures and production methods, and make it profitable. "But, in my mind, this is less of a tall mountain to climb than to show it works the first time," says the Managing Partner at AquaFounders Capital.

Ohad Maiman is optimistic. However, just now, some voices are questioning the validity of the model after observing the difficulties of some land-based producers - especially salmon - to scale up production. What does he think? "In a way the land-based sector has proven that it can produce fish to market, technically speaking, but it's not a blanket answer to everything, meaning each technology has its own benefits and its own challenges," he tells us.

From his point of view, specifically in salmon, there are large producers doing very well and it is not easy to compete with them from land, but he believes that the creation of a land-based salmon plant in import-heavy countries still makes sense and is feasible. He does not believe that land-based fish farming will replace net-pen fish farming in salmon, but it could do so in the right places and with the right business case. So, he insists, "I think that an important element of making land-based profitable is a very specific fit of the technology, of the location, and of the species."

A new vision for advancing land-based aquaculture

In fact, as he points out, another interesting aspect that is not often talked about is that land-based technology also supports sea cage production. "Ok, this is not purely land-based all the way to market fish, but it is supporting the technology, it is developing it further, it is building volumes there, and post-smolt has gone from a few 100 grams to 500 grams to a kilo in some cases. So, the technology itself is still increasing in usage but it's not an answer of everything will be land-based," he admits.

And insists, "I think it still goes down to setting up a profitable business case for land-based, it has to be a species that is happy with the system, that is high value overall and it helps where it's not available locally so that you have a competitive edge on transport and consistent fresh availability." It's what he calls "the critical trifecta for a strong business case in land-based," and it holds true for Pine Island Redfish, the company that just appointed him Chairman of the Board.

That thought of taking RAS technology and land-based production to a second stage is what, in just a few months of working hand-in-hand with Thue Holm, has evolved AquaFounders Capital's funding strategy and development focus. As Ohad Maiman exclusively told WeAreAquaculture, after studying the outlook, talking to potential investors, and, above all, realizing what really interested them - "we realized that both I and Thue are entrepreneurs in our DNA," he told us - the partners decided to turn the idea around and move from venture capital funding strategy to build two new companies from the ground up.

The focus is still on advancing the hardware, the software, and new species, but instead of investing here and there, their idea is, once again, to tackle the challenges of the sector by building companies that solve them. They will do it through two ways, one already known, a land-based farm for the development of new high-value species, and another more novel one, what they have called 'Farm in a Box' - a modular, standardized RAS farm concept with its own advanced operating system.

Their aim is to take 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 build. "We're looking here at prefabrication, modularity, different aspects that you can find in more mature sectors," Ohad explained about this innovative project. "It allows us to attempt to solve what we think is missing in land-based aquaculture," he added.  

The answer to the increase in global seafood demand

Ohad Maiman believes in evolution and natural selection, in what he calls "business Darwinism," where some business cases fail and some succeed and, he says, this is not random. Willing as he is to prove the worth of the land-based aquaculture business with RAS technology, he insists again and again that this idea that land-based is great no matter what the species, no matter what the location, is a fundamental mistake.

Therefore, when we asked him about the challenges that, in his opinion, the sector will face in the near future, he had a very clear answer. "The first challenge is for entrepreneurs and companies to really understand the technology, understand the complexity of it, and come up with the right species/technology/market fit," he says. "And then the next one is maturing of the sector to scale and profitability."

As he told us when talking about the new funding strategy and development focus course adopted by AquaFounders Capital, what is necessary for investors to enter into land-based is precisely that maturity so that they can have clear answers about cost, time, performance... And that is what he and his partner want to bring to the market with their 'Farm in a Box', clear answers to those questions, a solution for what he considers are the pain points right now for land-based to scale up significantly. Because, as he also told WeAreAquaculture, once investors feel that these questions have a clear answer then he expects there could be another flood of scaling of land-based.

"And the need is there," he says. "I don't expect more supply from the sea and not much more from net pens. So, there is a unique case for land-based where the need is there, the prototype in a few cases of the system has been proven, but now the maturity of the sector that needs to happen can unlock significant volumes."

If, as agencies such as the FAO indicate, in the coming years the world seafood supply must increase by 30% to 50% to meet global demand, the solution - Ohad Maiman believes - can only come from land-based. "That next big jump will be when building and operating these systems matures and becomes a bit more simple, cost-effective, and reliable," he states.

The time for profitability is here

And what comes after a mature industry? Profitability, of course. Five to ten years ago, it was a natural progression of a new technology. In the early days, the challenge was to keep the fish alive and prove that it worked. "The general zeitgeist of five years ago was that profitability was something we deal with later. It was more important to keep the fish alive and to get them to market, and then we could optimize," he recalls.

"However, the general financial environment has changed, and proof of concept has been achieved, so the honeymoon is over. The view from investors is 'Great, so it works. But now why is it not profitable yet?'," he smiles. And so, this is the current challenge. "The good part is that we know what the systems need to deliver, we know what the fish need, and we know it's possible."

"It's been interesting to see a whole new ecosystem of startups specifically looking to support land-based aquaculture," he says. That's where companies like ReelData AI and Biofishency Ltd. Come in, of which he is a Board Member and Chairman of the Board respectively. Businesses that, in his opinion, fit in "the thinking of what's missing and what can make aquaculture mature in the right direction." All this evolution is, in his view, a very positive development.

"Because it's not that far," he continues, "in some of the good cases close to break even or profitability has been achieved, and when you've already done the cycle several times that next challenge is on the operations to reduce costs and improve prices – with overall fish price index going up year on year, usually significantly higher than inflation -, improving the operational efficiencies, and building those systems cheaper and faster."

He is working on it, looking for a solution with his partner. Both entrepreneurs by nature, enjoy getting their hands dirty. Their experience is a plus, and they make the most of it together with their team. They have learned from their mistakes and can now be picky and focused. "It's not so much about time pressure, it's about however long it takes to develop those right solutions that help propel that next scale-up of the land-based sector."

As he said he would do when he decided to step down as CEO of The Kingfish Company, Ohad Maiman still serves as active founder, formally advising management and the Board, and maintaining regular contact with the company. However, he does so from the distance of seeing that it is "in very safe, competent hands," while he enjoys this new moment in which, he tells us, this summer he has been able to enjoy a proper vacation for the first time in years.

"Overall I can say, it's... and that's not something I could say before, but I'm having fun. It's a subject I like, and I know pretty thoroughly by now," Ohad concludes. He has fun and does not do it alone. "It's been a lot of fun working with Thue and I think we bring together a very complete picture." Undoubtedly, both will do everything possible so that we can all see that same vision.

About AquaFounders Capital

AquaFounders Capital is a project development company focused on securing a strategic position in the land-based aquaculture sector, across the entire value chain. Leveraging the unique first-hand experience of its founders in building and operating two of the industry’s leading companies – Ohad Maiman is the former CEO and founder of The Kingfish Company, and Thue Holm is the former CTO and founder of Atlantic Sapphire – the company aims to identify and tackle the most critical challenges and solutions needed for the terrestrial aquaculture sector to mature and scale. Its most recent projects are 'Farm in a Box', a plug-and-play solution for land-based fish farming, and the search for a land-based farm site for the development of new high-value species.