Victory Farms raised $5 million in new funding, which will be used to build hatcheries, nursery ponds and deep-water cages.
Ed Brakeman is a senior managing director at Bain Capital and Hans den Bieman is the founder and ex-CEO of Mowi, one of the largest salmon businesses in the world.
It is the startup's first institutional investment after seven internal angel rounds from the same set of equity. This funding will allow the company to expand into other countries.
Victory Farms was founded by Joseph Rehmann. On the call, he narrated his journey to start the company. After completing his degree, he got to work on a three-month aquacultural project in Ghana, which led to a three-year role as CFO of an Accra-based farm.
I learned a lot about scaling. I believed the platform I was running could be a lot bigger and scale a lot faster if we could connect more dots and create an end to end protein plant.
In 2015, Rehmann and Steve Moran explored Lake Victoria and performed feasibility studies on how they could use technology to disrupt the country's cold chain markets.
The opportunity to rebuild the fish value chain from scratch was found by them. They raised an angel round to start Victory Farms and serve a market with a 1.5 billion fish deficit.
Most of the red meat eaten by the average Kenyan is animal protein. Victory Farm says it uses technology to produce more fish and drive down costs for the thousands of market women who buy fish in small batches to cook and sell in local food markets.
We have scaled 2x faster than any other African fish company because we run a tech-enabled platform. We use data to build the most efficient operation in the world at half the capex of the current leader.
Over 15,000 market women go to buy fish at the company's 54 retail locations, and they use no electricity or ice.
He said that they use vertical integration to drive a more robust data set from end to end.
Victory Farms claims to have one of the highest margin structures in the fishing industry due to its technology. The company had a 130% CAGR. This growth rate can be maintained. There are no significant competitors to the company in the case of Victory Farms, which has a processing plant and distribution network in the larger East African region.
We don't see this as a competitive playing field because we are growing so fast. He said that the real competitor for us was hunger and consumers not being able to have an affordable option.
From a global perspective, Rehmaan thinks that Regal Springs is a bigger player. If its expansion into new countries takes off as planned, Victory Farms could become the largest end-to-end tilapia platform in the world within the next five years.
As much as Victory Farms is profit and growth oriented, it is also working towards becoming the world's most sustainable tilapia platform. I think it's exciting because we have a lot of tangible and measurable dimensions built into the business to achieve that.
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