Victory Farms, an aquaculture startup and tilapia fish farm consisting of incubators, breeding ponds, and deepwater cages, has raised $5 million in new funding.

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

It’s the startup’s first institutional investment after seven rounds of internal angels from the same batch of equity and debt investors (it raised $40 million in debt last year). This funding will allow the Kenya-based company to expand its operations to Rwanda, DRC, and Tanzania.

Joseph Rehmann founded Victory Farms in 2015. Rehmann recounted his journey toward starting the company during a conversation with the blog line. After completing his MBA program, he started working on a three-month aquaculture project in Ghana, eventually leading to a three-year position where he became CFO of a farm in Accra.

aquaculture tech

“I learned a lot about scaling up in aquaculture and all that. I believed that the platform I was using could be much larger and scale much faster if we could connect more dots — essentially creating an end-to-end protein factory,” said Rehmann, who for an investment bank and Microsoft has worked.

In 2015, Rehmann teamed up with his longtime business partner Steve Moran to explore Lake Victoria and conduct feasibility studies on how they could use technology to disrupt the country’s cold chain markets.

They concluded that a unique opportunity was to rebuild the fish value chain from scratch. They called for an angel round to start Victory Farms before launching in mid-2016 to serve a market with a fish shortage of about $1.5 billion.

The average Kenyan consumes only about 10-20% of animal protein intake, most of which is red meat. With a major fish shortage and retail prices as high as $5 a kilo, Victory Farm says it is using technology to produce more fish while cutting costs for the thousands of market women who buy fish in small quantities to cook and sell at local food markets.

“We have a technical platform and have scaled up 2x faster than any other African fishing company. And using data, we’ve built the most efficient operation globally with half the capex of the current global leader,” Rehmann told blog line via email. “We sell to mass market Africans through a highly innovative RTM cold chain that uses predictive data to push fish to thousands of market ladies across Kenya every day with less than 1% spoilage.”

The company has more than 54 retail locations where more than 15,000 market women go to buy fish, and they don’t use electricity or ice, according to Rehmann.

“We’re using vertical integration to drive a more robust dataset from start to finish,” 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.”

Due to its technology, victory Farms claims to have one of the highest margin structures in the fishing industry worldwide. The company recorded a CAGR of 130% between 2017 and 2021. Maintaining this growth rate can exude the utmost confidence. In the case of Victory Farms, Rehmann believes there are no significant competitors for the company – which also has a processing plant and distribution network – in Kenya and the greater East African region.

“We are 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 who can’t get an affordable protein option,” he said.

But from a global perspective, Rehmaan touts Zurich-based Regal Springs as a bigger player. However, Victory Farms could surpass Regal Springs in the next five years to become “the largest end-to-end tilapia platform” worldwide if expansion into new regions goes according to plan, the CEO argued.

While Victory Farms is profit and growth-oriented, Rehmann said it’s worth highlighting that the company is working to become the world’s most sustainable tilapia platform. “We have several initiatives underway and plan to build the world’s first carbon-negative fishing platform. And I’m excited because we’ve built a lot of tangible and measurable dimensions into the business to achieve that.”

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I have been blogging since August 2011. I have had over 10,000 visitors to my blog! My goal is to help people, and I have the knowledge and the passion to do this. I love to travel, dance, and play volleyball. I also enjoy hanging out with my friends and family. I started writing my blogs when I lived in California. I would wake up in the middle of the night and write something while listening to music and looking at the ocean. When I moved to Texas, I found a new place to write. I would sit in my backyard while everyone else was at work, and I could write all day.