March 17, 2020

By Lynda Kiernan

Dutch sustainable aquaculture-focused investment fund Aqua-Spark announced it has made an undisclosed investment in Swedish Algae Factory – a startup that uses algae to convert effluent water from Recirculating Aquaculture Systems (RAS)-based operations into value-added products.

Founded in 2016 in Gothenburg, Sweden, Swedish Algae Factory founders Sofie Allert and Angela Wulff wanted to use algae to create an industry that would have a positive effect on climate change.

Through their process, the startup extracts a unique nanoporous silica material from a unicellular microscopic algae called diatoms. Depending on its surrounding environment, this extract has exceptional light-altering properties and the ability to absorb or release particles, giving it the ability to replace more harmful and less efficient chemicals in a range of industries.

“We are really excited that with this injection, we’ll be able to increase production and meet the growing demand for Algica in the personal care and solar energy industries,” said Sofie Allert, CEO and co-founder, Swedish Algae Factory. “We are also very happy to bring Aqua-Spark on board, a strong investor with great expertise from the aquaculture sector.”

Branded under the name Algica, this material can improve the efficiency of solar panels, for example; or can be used for personal cleansing, moisturization, or for ultraviolet light protection in personal care products.

“Swedish Algae Factory’s implementation of the circular economy impressed us from the start,” said Mike Velings and Amy Novogratz, co-founders, Aqua-Spark. “By upcycling wastewater into high-value products for the solar and cosmetic industries, the brand is solving a major issue for land-based aquaculture and sustaining a separate, diversified business model.”

Aquaculture is the fastest growing segment in animal protein production, and was named as one of the Ag Sectors to Watch in 2019 by Philippe de Lapérouse and Mark Zavodnyik of HighQuest Consulting.

“Since 1960, global demand for seafood has increased 3.2 percent annually, outpacing the 1 percent annual growth in the world’s population over the same time period,” noted de Lapérouse.

This growing demand, connected with the loss of freshwater availability, and increased consumer desire for localized and traceable production are driving continued growth for land-based aquaculture.

Predictive modeling by The World Bank estimates that by 2030, 62 percent of food fish will be provided through aquaculture, and from 2030 onward, driven by pressure to fill the gap, aquaculture will dominate supply in the industry, according to the report, Fish to 2030, Prospects for Fisheries and Aquaculture.

With the development and adoption of RAS systems, the aquaculture industry is able to increase efficiency and cut its water usage, but the need to discharge water on a daily basis remains. And even though solid waste is filtered out of this discharge, there are still high concentrations of nitrogen and phosphorus detrimental to the local environment.

Swedish Algae Factory offers a sustainable, circular business model in which the algae cleans wastewater, absorbs carbon dioxide, and creates nutrient-rich organic biomass that can be used in fish feed rations or fertilizer.

“Their 30,000-foot approach to aquaculture is a great fit for our industry vision and portfolio,” said Velings and Novogratz.

This investment in Swedish Algae Factory marks the 19th investment for Aqua-Spark since 2015, and adds to the fund’s portfolio of complementary companies, technologies, and inputs with a common goal of the sustainable production of aquatic life.

To-date, Aqua-Spark has EUR132 million (US$145 million) in assets under management that work as an ecosystem – agreeing to collaborate on optimal solutions, and to work together toward overcoming the biggest challenges faced by the industry with a shared vision for more efficient and sustainable global aquaculture production.

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