Aquaculture startup Victory Farms raises US$5m funding, its first institutional investment

KENYA – Victory Farms, an aquaculture startup and farm for tilapia fish comprising hatcheries, nursery ponds and deep-water cages, has raised US$5 million in new funding.

The investment was led by Ed Brakeman, a senior managing director at Bain Capital and Hans den Bieman, founder and ex-CEO of Mowi, one of the largest salmon businesses globally.

It is the startup’s first institutional investment following seven internal angel rounds from the same set of equity–and debt investors (it raised US$40 million in debt last year). This funding will allow the Kenyan-based company to expand its business into Rwanda, DRC and Tanzania.

So far, the company has gained a lot of attention. According to Joseph Rehmann, the company’s CEO, Victory Farms has more than 54 retail outlets where over 15,000 market women go to buy fish, and they require no energy or ice.

“We use vertical integration to drive a more robust data set from end to end,” he said.

“This allows us to innovate and create more cost-effective solutions through our systems and the power of data to deliver a better, fresher product to more consumers.”

Victory Farms claims to have one of the greatest margin structures in the fishing business due to its technologies.

The company experienced a 130 percent CAGR between 2017 and 2021. Maintaining this rate of expansion can instill trust.

In the case of Victory Farms, Rehmann believes the company, which also has a processing factory and distribution network, has no major competitors in Kenya and the larger East African region.

“We’re growing so much faster than them (the competition) that we don’t see this as a competitive playing field. The real competitor for us is hunger and consumers not being able to have an affordable protein option,” he said.

Victory Farms was founded in 2015 by Joseph Rehmann. Rehmann described his path to establishing the company.

He got to work on a three-month aquacultural project in Ghana after finishing his MBA program, which led to a three-year career as CFO of an Accra-based farm.

“I learnt a lot about aquaculture scaling and all that. I believed the platform I was running could be a lot bigger and scale a lot faster if we could connect more dots — and basically creating an end to end protein plant,” said Rehmann, who has also worked for an investment bank and Microsoft.

Rehmann teamed up with his long-time business colleague Steve Moran in 2015 to study Lake Victoria and conduct feasibility studies on how they may utilize technology to disrupt the country’s cold chain sectors.

They came to the conclusion that there was a once-in-a-lifetime opportunity to reconstruct the fish value chain from the ground up.

Victory Farms was founded with an angel round and launched in mid-2016 to address a market with a US$1.5 billion fish shortfall.

The average Kenyan consumes just approximately 10–20 percent of their animal protein intake, the majority of which is red meat.

With a major fish deficit and retail prices nearing US$5 per kilo, Victory Farm claims to employ technology to grow more fish while simultaneously driving down costs for the thousands of market women who buy fish in tiny quantities to cook and sell at local food markets.

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