Cuna del Mar Invests $15M in Open Ocean Fish Farming Tech

April 12, 2017

Cuna del Mar, the investment fund of Christy Walton, has invested $15 million in Boston-based InnovaSea Systems Inc. – developer of an all-inclusive system for open ocean fish farming.

Created in 2015 through the merging of two companies previously held in Cuna Del Mar’s portfolio – Maine’s Ocean Farm Technologies Inc. and Seattle-based OceanSpar – InnovaSea is dedicated to developing the next generation of technology for open ocean aquaculture. The company has been expanding its Boston headquarters to enable the company to continue transforming its underwater pens into fully integrated solution systems that will help farmers track their fish stock from origination to harvest.

Cuna Del Mar’s mission is to shift demand for seafood away from wild-caught populations and conventional fish farming systems to new production methods geared toward open ocean aquaculture that are economically viable while also being environmentally and socially sustainable. Since this segment is still in a nascent stage, Cuna Del Mar invests in early stage private companies, and targets the acquisition of assets for the development of new businesses, offering each company in its portfolio financing, governance, and advisory services.

InnovaSea, which currently employs a staff of 40, is presently eyeing a commercialized release of its product in 2018. However, the company is testing its technology with two other Cuna Del Mar portfolio companies that operate fish farms in Panama and Mexico, reports Undercurrent News – indicating they are probably Open Blue, the largest deep water open ocean farm in the world located seven miles off the Atlantic coast of Panama, and the largest supplier of cobia to the U.S. market; and Earth Ocean Farms, an offshore site located in the Sea of Cortez, Baja, Mexico. The fund also has an  oyster farm, and has been working with genetics now for over 8 years for virus and heat resistance, according to Walton.

Big Fish

It might not be widely known, but Cuna Del Mar is not the only investment vehicle related to the Walton family dedicated to capitalizing upon the global increase in demand for fish protein and sustainable methods of production.

In February of this year, Zoma Capital, the family investment office of Ben and Lucy Ana Walton, and Encourage Capital announced that the two have partnered to launch Pescador Holdings, the first-of-its-kind sustainable seafood investment holding company.

The launch of the fund, which will be seeded with an initial commitment of $10 million from Zoma Capital,  is the culmination of more than two years of investment research funded by Bloomberg Philanthropies and the Rockefeller Foundation under the Vibrant Oceans Initiative. The initiative is a $53 million, five-year effort that integrates financial strategies that are geared to facilitate the transition to more sustainable fishing, and aims to boost fish populations in Brazil, the Philippines, and Chile.

“The Zoma Capital and Encourage Capital partnership marks the first time that a research-based, mission aligned investment company has been designed from the ground up to capitalize on the demand for more sustainable seafood,” said Jason Scott, managing partner of Encourage Capital. “Local company, government, non-profit and stakeholder partnerships are equally central to this groundbreaking systemic approach, ensuring the ongoing protection and restoration of fisheries.”

For its initial investment, Pescador Holdings has made an undisclosed investment in Chile-based Geomar. Founded in 1993, Geomar is a vertically integrated “shore to shelf” sustainable seafood business that works with more than 700 artisanal fisheries in Chile to streamline the supply chain by direct-sourcing from 134 capture zones across Chile. Creating a premium seafood niche, the company then cans, transports, and sells the seafood directly to retailers in Chile, North America, Europe, and Asia.

Geomar’s central manufacturing hub is considered one of the most modern facilities in Chile’s seafood industry, and is currently located in Coronel – one of the poorest regions of the country. The company employs 150 people – mostly women, who are engaged in semi-skilled seafood processing work.

“We are excited to partner with Pescador Holdings to help us grow Geomar to meet its full commercial and impact potential. With these resources we will increase regional employment in Chile, increase the volume and quality of sustainable seafood sourced from fisherman, and invest in distribution of Geomar products directly to customers who appreciate high quality, sustainably sourced seafood.”

Not Just the Waltons

Last month Family Capital reported that there is a growing trend among family investment firms to target investments in sustainable fishing operations and initiatives.

Beside the Walton’s Cuna Del Mar, Zoma Capital, and Pescador Holdings, it was recently announced that Ferd, a Norwegian investment vehicle of Johan Andresen and his family, announced it has acquired a 17 percent stake in Benchmark Holdings.

Founded in 2000 in the UK, Benchmark has made a series of acquisitions that have built a portfolio of companies that make Benchmark a leader in specialized feed for aquaculture operations, a global leader in salmon breeding and genetics, and a leading developer of health products and vaccines for shrimp, seabass, seabream, and salmon, according to a recent press release announcing the deal.

Furthermore, Family Capital reports that White Owl Family Office, the investment arm for the McArthur and Carrick families of Canada, acquired the Canadian fishing group, Great Lakes Food Company.

Then there is the Dutch, pure-play sustainable aquaculture investment fund Aqua-Spark which announced two investments in the final days of 2016, investing $2.75 million in Madagascar-based sea cucumber farming operation, Indian Ocean Trepang, and $2.75 million in LoveTheWild, a U.S.-based producer of sustainable, ready-to-prepare, frozen seafood meal kits. It was later revealed that Leonardo DiCaprio was also an investor in the round for LoveTheWild.

-Lynda Kiernan

Lynda Kiernan is Editor with GAI Media and daily contributor to GAI News. If you would like to submit a contribution for consideration please contact Ms. Kiernan at lkiernan@globalaginvesting.com.

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