Aqua Cultured Foods Raises $5.5 Million in Seed Funding to Disrupt ‘Big Fish’ With Fungi

Aqua Cultured Foods has announced $5.5 million in a Seed funding round to accelerate its mycoprotein-based seafood.

The new funding was led by Stray Dog Capital, a venture capital fund that specializes in investing in alternative protein ventures. Other participants included H Venture Partners, Aztec Capital Management, and Amplifica Capital, as well as follow-on investments from current investors Supply Change Capital, Big Idea Ventures, HPA, Aera VC, Kingfisher Family Investments, and Swiss Pampa. The funding round also included a strategic investment from CJ CheilJedang, a South Korean-based global food and bio company.

Fungi-fermented seafood

Aqua Cultured Foods says the new funding will be used to equip new facility, scale up production, bring products to market, add key talent, and expand its roster of restaurant and foodservice outlets for product introductions this year.

According to Aqua Cultured Foods’ CEO Anne Palermo, the company is grateful to have mission-aligned partners that offer strong strategic value for the next phase of its growth. “Being good stewards of investor capital is important to us, so along with hitting milestones earlier than expected, we are benefiting from government programs, academic resources, and other advantages to get to market quickly,” Palermo said.

Aqua Cultured Foods is known for its low cost of scaling and path to price parity, thanks to proprietary fermentation methods that use relatively affordable inputs and equipment. Recently, the company acquired a food-grade facility that was already built out nearly to its requirements.

The company estimates that this will save more than a million dollars in construction costs. Additionally, Aqua Cultured Foods was recently accepted into the Illinois Office of Business Development’s EDGE program, which provides tax incentives to growing companies, saving the company hundreds of thousands of dollars in taxes over the next decade.

Stray Dog Capital Partner Johnny Ream spoke highly of the founding team, product, and key partnerships, saying, “the work Aqua is doing with alt-seafood has immense potential to drive both human and planetary benefits in a massive $100B+ global market.”

Scaling sustainable seafood

According to a recent report, the global vegan seafood market was valued at $42.1 million in 2021 and is projected to reach $1.3 billion by 2031 with a CAGR of more than 42 percent.

Aqua Cultured Foods approach to producing seafood alternatives is unique. The company is developing calamari, shrimp, scallops, and filets of tuna and whitefish with proprietary mycoprotein fermentation processes that do not use any animal inputs, genetic altering, or modification. Unlike plant-based processed foods that are formulated with starches and protein isolates, Aqua’s alt-seafood retains its naturally occurring fiber, protein, and other micronutrients. The company also produces minced “seafood” fillings for applications such as dumplings, ravioli, and sushi rolls.

The alternative seafood market is rapidly growing as consumers become more aware of the environmental impact of commercial fishing and the health risks associated with consuming seafood. Fish farming practices result in habitat destruction, pollution, and the spread of diseases to wild fish, and the industry relies heavily on antibiotics and wild-caught fish for feed.

Moreover, seafood, particularly finfish, is a source of foodborne illness caused by bacteria, viruses, and parasites. Aqua’s products offer a more sustainable and healthier alternative to traditional seafood, and its innovative approach has the potential to disrupt the $100 billion-plus global seafood market.