Friday, January 31, 2014

Amy Novogratz and Mike Velings, managing partners of Aqua-Spark

Amy Novogratz and Mike Velings are managing partners of Aqua-Spark, a Netherlands-based investment fund focusing solely on opportunities in sustainable aquaculture. Having officially launched in November 2013, the group plans to make its first investments in the coming year.

This interview appeared in the January February 2014 edition of International Aquafeed magazine

Tell me about yourselves and how you arrived in aquaculture

Amy: Mike and I met through the 2010 TED Prize Mission Blue Voyage to the Galapagos, led by celebrated oceanographer, explorer and author Sylvia Earle. The voyage convened a hundred scientists, environmentalists, entrepreneurs, and artists with the purpose of addressing how we could protect the ocean. We came away hugely impacted, and ultimately this was the impetus for Aqua-Spark. On a boat with the world’s foremost ocean and fish experts, it was impossible not to get sucked into the enormity of the challenge – from overfishing to the terrifying fact that our oceans could become virtual deserts in less than 35 years.
Months after the voyage, at a Conservation International Meeting, we heard Dr Stephen Hall of WorldFish give a talk on aquaculture and its potential as a solution for these problems. The conservationists all agreed that we’d need to work together to get this right and do it sustainably. We started a two-year period of learning, researching, building a network of experts, and figuring out the right role for us to play in the expansion of the industry. This past November, we officially launched Aqua-Spark.

Your fund invests in small and medium enterprises. What can these offer investors (and the world) that bigger and safer investments can’t?

Mike: Bigger is not per se safer. And what is defined as small and medium (SMEs) can still be quite sizable and reputable. We believe there is a natural limit to how big an aquaculture company can be – at a certain point you reach the limit of how intensive you can go. The aquaculture industry is also very fragmented, with very few large companies in the space.
So much of the expected growth in production will have to come from SMEs, and part of our mission is to connect these enterprises for potential collaboration, where it will be beneficial.
How can venture capital improve aquaculture practices in China and Southeast Asia?
We believe that if we make investment available to ‘best in class’ companies, this will help set a bar for sustainability and other key practices. If we can help these companies succeed, then others will follow suit. This approach is of course applicable anywhere around the globe, not exclusively in Asia.

What about aquaculture as a way of alleviating poverty?

Amy: One of our partners, WorldFish, has been working on this for decades, mostly in Asia and Africa. They recently launched the WorldFish Incubator, which works with many aquaculture projects globally, such as aquaculture cooperatives in India. They aim to get them investment-ready – basically turning them into a business. As a partner of WorldFish, Aqua-Spark gets the first look at them. We’re looking to receive 10 a year for consideration, and hopefully one of them will develop into an investment.

All aquaculture producers see consumer confidence in farmed fish as a major stumbling block. How do you think this can be turned around?

Amy: Many consumers don’t even know why they think farmed fish is bad; they just heard it somewhere and it stuck. Aquaculture has come a long way in the past decade, whether it’s farming of more sustainable species, reduction in antibiotic usage, or more sustainable feed practices.
We have much more control of how fish are farmed, and we need to educate people on the benefits of aquaculture, such as the ability to monitor what fish have been exposed to, where they were grown, etc. Ultimately we want to arm people with good information so they can make the right choices when purchasing fish.
The replacement or near-replacement of fish-derived ingredients is the big challenge for 21st-centry aquaculture nutrition. Which novel ingredients particularly interest you?
Mike: Insects. They can be farmed in remarkably sustainable ways while also solving the major challenge of food waste.
Amy:  What is needed is technology that can produce material in a volume that will be interesting to feed manufacturers. We’re beginning to see a wave of innovative processes to produce insect-based ingredients, but no one has made that step yet.

What message do you have for the small business owners and ‘ideas people’ among our readership?

Amy: The message is that while we’re the first fund wholly interested in sustainable aquaculture investment, there are more investors out there looking to do the exact same thing. We were recently in a meeting at Stanford University where 80 people presented their projects. There was a really good mix of ideas in the room, but also a good amount of investing power.
Our website has an open form and we encourage anyone to submit their project. Things are only starting right now, but investment in sustainable aquaculture really has begun, and we’re in it for the long term. As the industry continues to expand, we need to continue to improve it and make it as sustainable and transparent as possible.

Amy, you used to lead the prestigious TED Prize. I know many of our readers are interested in it from following their LinkedIn! What are aquaculture’s ‘ideas worth spreading’?

Amy: We want to spread the idea that sustainably farmed fish is the best animal protein available to humankind.
We’ve seen so many global companies with great ideas and technologies that could transform this industry. We are convinced there is a great future for aquaculture, and this is a critical idea worth sharing. Our oceans depend on it, as do billions of people who look to seafood for their protein.

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