Aquaco has received an investment from Sea Delight and its owner, Eugenio Sanchez, to expand production at its land-based pompano farm in Fort Pierce, Florida, U.S.A.
Aquaco Founder Joe Cardenas said Sea Delight and Sanchez’ private investment company, Tamaran Investment, contributed to a Series A fundraising round. Sea Delight is a provider of frozen and fresh seafood based in Coral Springs, Florida, U.S.A.
“Like Aquaco, Sea Delight is a Florida-based company and as such, we are looking forward to supporting the growth of their aquaculture operation as well as sharing over 30 years of comercial experience to help drive market access for such a fantastic, high-quality product,” Sanchez said in a press release.
Cardenas told SeafoodSource he has thus far raised USD 1.7 million (EUR 1.5 million) of the USD 2 million (EUR 1.8 million) Series A round, in addition to USD 5.1 million for the company’s initial Seed round. A separate Mezzanine round in the spring of 2021 raised USD 250,000 (EUR 220,000) to pay for a hatchery, which has now been constructed “for self-reliance and seed consistency.”
Aquaco’s pilot farm previously had an annual production capacity of 30 metric tons (MT), but Cardenas made the decision to shut down the farm in late November 2021 to expand and retrofit it. That shutdown will remain in place until the end of Q1 2022, according to Cardenas, with the first post-shutdown harvest scheduled for Q1 2023. The upgraded farm will have 10,000 square feet of grow-out modules, which will triple Aquaco’s production to 90 MT annually. Following the full funding of the next phase of growth, Cardenas has plans to expand to a 500-MT capacity 18 months from now.
“Our team worked extremely hard to demonstrate this species was ready for a greater audience. The knowledge and efficiencies gained in the past three-plus years gave confidence to the fact we were ready to expand and meet the supply problem that has historically hindered the wild Florida Pompano market,” he said.
Cardenas said the timing and size of Sea Delight’s investment will put Aquaco on a much more certain path to future success.
“Adding the strength and know-how of industry partners [like Sea Delight] was a goal that [I] set out with last quarter and those discussions have led to a tremendous opportunity for both Aquaco and Sea Delight,” he said. “We could not have been more fortunate to have found a partner with similar ideals. Both principles have a sense of reserved optimism for the industry and understand that both patience and perseverance are needed to be successful.”
Cardenas has also relied on an unorthodox form of fundraising for the aquaculture space – crowdfunding. Aquaco recently closed a campaign on Harvest Returns, which describes itself as “the internet's one-stop marketplace for investing in farms and timberland,” that pulled in USD 540,000 (EUR 473,000). Cardenas had set his Harvest Returns campaign goal at USD 750,000 (EUR 659,000), but he said he ended the offering “due to progress in areas outside” the crowdfunding realm.
“Sea Delight’s partnership, along with a successful capital campaign with Harvest Returns, meant that construction on new systems can begin,” Cardenas said.
Altogether, the Aquaco project will have taken USD 7 million to USD 7.5 million (EUR 6.2 million to EUR 6.6 million) to scale up. Despite the price tag, Cardenas previously told SeafoodSource he has proceeded cautiously from a financial standpoint, avoiding debt until recently.
“We stayed away from any type of debt for the first round, because it wasn’t practical in my eyes. But now that we’ve got a proof of concept done, a market we’re selling to, and assets, it gets easier to make USDA-backed lenders comfortable with debt-funded growth,” he said.
As predicted, Cardenas has had no shortage of interest in Aquaco’s pompano. He said Aquaco now counts NorthStar, Bar Harbor, Halperns, Slade Gordon, and Cod and Capers has his five biggest clients, representing 90 percent of his business.
“The retail is promising, with a good footprint around Atlanta market with Sprouts and talks are underway with Publix for when we reopen with greater availability,” he said.
Cardenas has acknowledged having even bigger dreams of opening three or four more sites – not necessarily farming only pompano – would take Aquaco from a USD 10 million to USD 12 million (EUR 9.1 million to EUR 10.9 million) operation to more than USD 100 million (EUR 91 million) in annual revenue. But he said he would continue to proceed cautiously “because lots of projects go way too fast, way too quickly, and oftentimes those projects end up in the ‘did not make it’ pile.”
“We can always expand if things continue to go well for us. But one of the things the aquaculture industry has to do is take a breath, get some winners out there, and show people this is doable and that this is a profitable industry,” he said. “There are not enough winners operating at any scale. Scaling up is more investor-driven than operator-driven – if you want to scare an operator to death, tell them to scale. Somewhere in the middle is the right answer, and that’s what we hope to find.”
Photo courtesy of Aquaco
