Sustainable aquaculture in Thailand has received a financial boost thanks to a landmark $150 million blue financing agreement signed between the Asian Development Bank (ADB) and the Thai Union Group Public Company Ltd. This is the first time the ADB has provided a loan to the private sector of Thailand’s agribusiness industry.

Why does this matter? Thailand is the second largest producer of shrimp globally, after China. Thailand produced 266,000 metric tons (mt) of shrimp in 2024, nearly half of which was exported. Globally, shrimp farming has an outsized footprint financially and environmentally. The world shrimp marked was valued at $45.3bn in 2023 and is expected to reach $102.6 billion by 2034 due to its growing popularity.

However, shrimp farming has a carbon footprint that can exceed pork in terms of emissions intensity – an average of 13 kg CO2e/kg. Half of these emissions are down to shrimp feed. Commonly, soy may compose 30% of their diet but intensive monoculture farming of soy is a leading cause of rainforest clearing in South America. The other half of direct shrimp farm emissions come from the energy required to mechanically aerate water.

Further environmental degradation occurs if mangrove forests – high carbon sequestration reserves – are cleared to make way for the aquaculture industry. Meanwhile, antibiotics, shrimp waste and uneaten feed contribute to water pollution that can result in algal blooms and ecosystem disturbances. Thus, the blue financing agreement for sustainable aquaculture in Thailand comes at an opportune moment.

Two companies in Ocean 14 Capital’s investment portfolio are contributing to improved aquaculture sustainability. SyAqua, based in Singapore, is revolutionising shrimp genetics and alternative feeds to preserve wild fish stocks. In China, 60% of hatcheries are SyAqua customers and the company delivers some of the most competitive industry results.

AquaExchange is a technology platform analysing data on shrimp and fish production. Understanding the data helps companies to reduce crop expenses, manage crop finance and automate the procurement and harvesting for aquaculture farmers. AquaExchnage currently automates large areas of shrimp farming operations in India, some12% of the domestic industry. Ultimately, their work improves the productivity and profitability for the aquaculture ecosystem.

Complementing these private sector efforts is a £3 million ($4 million) research initiative led by the University of the West of Scotland and partnered by the University of Strathclyde is aiming to revolutionise shrimp farming in South East Asia. The three-year project is developing low-cost, real-time monitoring tools to help small-scale farmers detect pathogens, monitor water quality and predict environmental threats using biosensors and AI-driven climate modelling.

By working closely with local farmers in Vietnam and Thailand, the team ensures the technologies are practical, affordable and gender-inclusive. The tools are designed to reduce mortality rates and boost productivity – offering a scalable blueprint for sustainable aquaculture across the region and beyond.

As global demand for shrimp continues to rise, the need for more sustainable, transparent and resilient aquaculture systems has never been greater. From major financial backing and cutting-edge genetic and digital innovations to grassroots-level research supporting smallholder farmers, a range of coordinated efforts are converging to transform shrimp farming in South East Asia.

22nd January 2024, London: Ocean 14 Capital Fund 1 SCSp (“O14C” or the “Fund”), a private equity impact investment fund focused on the United Nations’ Sustainable Development Goal 14 (SDG 14): Life Below Water, has entered into an investment agreement with AquaExchange Agritech Private Limited (“AquaExchange”), an aquaculture technology and fintech platform that leverages data analytics to deliver e-commerce, farm automation and market linkage solutions for aquaculture farmers, allowing a significant dial up of sustainability transformation as well as benefits to both customer and seafood farmers.

Under the agreement, the Fund will invest $3 million through the PHT platform, an investment vehicle aimed at delivering technologies to the Shrimp industry to drive sustainability, which will act as the lead investor.

The investment is primarily to provide working capital that will allow AquaExchange, which has already raised $3 million in seed funding in 2021 from investors including Endiya Partners and Accion Venture Lab, to accelerate growth in India and expand its operations to Vietnam and Ecuador, while also further developing its product portfolio.

Founded by Pavan Kosaraju in 2020 and Vijayawada (Andhra Pradesh), AquaExchange, currently automates approx. 34,000 acres of shrimp farming operations in India, equivalent to 12% of the industry.

In 2020, the company launched PowerMon, the world’s first patented power management technology that provides farmers with complete farm power monitoring and aeration control through the convenience of a mobile app; and AquaBot, the shrimp industry’s only moving auto-feeder that has been deployed at scale, allowing driving efficiency in farm feeding operations which represent.

“Pavan and his 20 plus team have managed to take a very significant market share of the Indian shrimp market in just a couple of years, by providing simple but robust technology to farmers that have an immediate impact on production while starting to develop datasets and farm insights that can support farmers access to credit,” says Piers Lakin, Senior Associate of the Fund’s Investment Adviser, Ocean 14 Capital Ltd.

The company operates across the value chain starting with a patented ‘Hardware-as-a-Service’ model on subscription basis that allows for and 24 hours seven days a week remote farm monitoring and automated feeding under the brand name NextAqua, and has expended to become a fintech enabled e-commerce platform that offers high quality inputs at best prices directly from manufacturers.

The third part of the company’s full-stack offering is ‘Harvest-as-a-Service’, a market linkage platform that facilitates harvests at the farm-gate with transparent pricing and assured spot payments to the smallholder farmers.

“AquaExchange is committed to transforming the aquaculture farming process through the use of advanced technology. We plan to refine and scale our unique reinforcement framework, wherein farmers are immediately incentivized for sustainable practices through reduced input costs and higher offtake prices, emphasizing our commitment to sustainable practices in the industry,” says Pavan Kosaraju, Chief Executive Officer, AquaExchange, adding “With this funding round, we aim to equip many more aquaculture farmers with the right technology to reduce costs and increase productivity while enabling global protein sustainability”.

AquaExchange has partnered with various players in the ecosystem such as hatcheries, feed mills, medicine and equipment manufacturers, processing companies, and banks to provide these services. It has also developed innovative solutions such as self-test Vibrio kits, prebiotics, probiotics, and traceability systems in collaboration with other partners such as HiMedia, Karyotica, Imkuraq, and WholeChain.

“All of this has allowed AquaExchange to establish a strong foothold in Indian shrimp aquaculture, providing a solid platform for further expansion and we love the fact there are potential synergies with our first investment SyAqua, which is rapidly growing its presence in India. We are excited about the significant boost to sustainability transformation this technology will allow,” adds Ocean 14 Capital’s Lakin.

-ends-

About Ocean 14 Capital Fund I SCSp

Ocean 14 Capital Fund 1 SCSp (“O14C” or the “Fund”) is an impact fund targeting €200 million and focused on driving a sustainable and regenerative blue economy. The Fund’s investment adviser, Ocean 14 Capital Ltd, has a team who combine more than 65 years of investment, impact and industry experience. The investment adviser’s team and advisers are considered to be some of the world’s most renowned scientists and marine biologists, and it is considered that they have unparalleled access to proprietary deal flow and sector knowledge.

www.ocean14capital.com

About AquaExchange

Founded in 2020, AquaExchange, based in Andra Pradesh, India, is a technology platform that leverages data analytics on shrimp and fish production to reduce crop expenses, manage crop finance, automate procurement and harvest facilitation for aquaculture farmers. It uses patented IoT devices and fintech services to enhance transparency and efficiency and so improve productivity and profitability for the aquaculture ecosystem.

www.aquaexchange.com