The investment will support Tilabras Aquaculture’s growth plans, including building new hatchery and breeding facilities and expanding its existing farming and processing plants
Located in the south of Brazil, family-owned Tilabras is a vertically-integrated white fish farming producer. Its fish, which are raised in deep waters and large pens, are fed a vegan diet, which reduces its CO2 footprint. No contaminants, antibiotics, growth hormones or chemicals are added.
“Tilabras is a high-growth company that has a spectacular growth plan based on expansion of volumes and vertical integration and diversification of markets,” Francisco Saraiva Gomes, founding partner and chief investment officer at Ocean 14 Capital, told Impact Investor.
Tilabras “has a convergent business model in that it produces a fish that is more sustainable than other alternatives in the market”, he said.
Ocean 14 Capital typically stays invested in a company from 5 to 8 years, Saraiva Gomes said, adding it is aiming for an annual net internal rate of return of 15% for its blue economy fund.
Tilapia aquaculture is six times more efficient at converting plant-based feed into animal proteins than cattle farming, according to Ocean 14 Capital. It is also cheaper than other commonly farmed fish, such as salmon, which makes it an attractive protein source for the growing global population.
According to a 2015 WWF report, the world’s oceans are worth $24trn and generate $2.5trn in goods and services annually, making them technically the seventh-largest economy worldwide. Ocean 14 Capital expects the tilapia market to be worth $9.2bn by 2027.
“Life on earth depends on functioning oceans – they are the lifeblood of our planet,” said Chris Gorell Barnes, founding partner of Ocean 14 Capital, which operates the first large investment fund focused solely on the blue economy. “As the global population continues to grow, demand for animal protein will continue to increase.”
Ocean 14 Capital’s cooperation with Tilabras “focuses on enabling this transition to large scale, low-impact fish farming, harnessing the best of modern technology”, said Gorell Barnes.
“We see huge growth opportunities throughout the blue economy and our expectation is that the real blue economy revolution is the one that will happen through the tens of thousands of businesses that already exist,” said Saraiva Gomes.
“Our expectations are not in the start-up stage but in the industrial fabric of these sectors,” Saraiva Gomes said. “We hope that through us and others, these existing companies will adopt technology and best practices and other necessary trends to increase their profitability and their positive impact.”
Monaco’s sovereign wealth fund
The Ocean 14 Capital Fund 1 has made four investments since its launch in December last year. Previously, it invested in Singaporean shrimp breeding technology specialist SyAqua, Norwegian plastic management platform AION and MITO, a clam hatchery and breeding company from Italy.
Last month, it received €10m from Monaco’s sovereign wealth fund, taking its total fund raising to €100mn since its launch. It is aiming for a close of €150mn. The private equity fund, which focuses on growth-stage companies that can demonstrate a positive environmental impact and contribute to achieving the United Nations’ Sustainable Goal 14 (SDG 14) – life below water – is on track to invest in eight companies this year. It is targeting a portfolio of up to 25 businesses within three years.
“Ocean 14 Capital’s expertise, knowledge, and the fund’s ability to execute will help us enhance growth while improving resource efficiency,” said Nicolas Landolt, founder of Tilabras. “The period ahead of us is one of great expansion and development and we must do so with an ever-stronger commitment to sustainability. We are looking forward to building our hatchery and breeding operations, as well as the expansion of our farming and processing plants.”