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RASTECH23: What late stage VCs look for in a RAS company

Your recirculating aquaculture system (RAS) company has made it through that critical start-up stage. The challenge now is how to land a late-stage venture capital investor that can help your baby scale up.

Alexandre Van Der Wees, investment director of global investment firm Creadev, said RAS companies need to impress investors and show that they have growth potential. Van Der Wees spoke at the Investors’ Forum during at the RASTECH 2023 Conference and Trade Fair held in Florida this April.

Growth that can be replicated

“Typically we need to see a project running small-scale or middle-scale… ideally with 500 tons capacity  facility that can be replicated for the next expansion,” said the Van Der Wees. “For 90 percent of the time we do exit out investments… But what we aim for is to stay for the long run, 10, 20, to 30 years.”

Launched in 2002, Creadev has an annual investment capacity of  €250 million (US$275.1 million). It creates 5-10 partnerships each year. Among the firm’s aquaculture investments are yellowtail RAS firm The Kingfish Company, insect protein producer Innovafeed, cloud solution company Kai Science, and shrimp RAS producer Noray Seafood.

Here are the key factors that Creadev looks for when investing in finfish RAS companies:

1. Creadev checks a companies forecasted revenue and compares it with the current situation, said Van Der Wees. “This tells is if it’s going to workout, or not.”
2. We need the see the project running. The investor wants to see successful implementation and results “that can be replicated for the next expansion.”
3. A competent team that how to use the equipment and is capable of producing, “and selling at the right price and the right size.”
4. An operation that has good key performance indicators (KPIs). “We plan to get our money back on a cash flow basis. Capex per kilo is important,” said Van Der Wees.
5. The company needs to have a site available that has the required permits, and design-ready.
6. A company that has the capability to finance in debt and equities.

Creadev looks companies that that know who and how to talk to the right people for money, according to Van Der Wees. “While we are a large investor, we will not take on all the the financing,” he explained. ” We almost always do it with other investors.”