Investing in aquaculture: the year’s key trends

The FAO’s State of World Fisheries and Aquaculture report 2024 revealed a historic milestone – that global aquaculture production surpassed capture fisheries as the main producer of aquatic animals – but the year’s story regarding investments into aquaculture innovation was less positive.

Indeed, in 2024 aquaculture startups raised $619 million in capital from venture funds, a figure that was 28 percent* below the previous year’s $854 million. While the total amount of funding mirrors the lukewarm venture climate across the board, the 15 percent increase in the total number of deals, from 61 to 70**, suggests that there’s still an appetite from VCs to fuel continued aquaculture growth.

Excluding the top three rounds by value, the total capital declined by 38.4 percent, signalling that the downturn in 2024 is not solely due to the absence of larger, later-stage deals, but reflects a broader decrease in investor appetite.

The following factors contributed to the decline in venture capital deployed:

• Only one round of over $100 million was publicly announced in 2024; No other series C or series D rounds were disclosed.

• The average round sizes for seed and series B rounds decreased by 81.6 percent and 45.4 percent YoY respectively.

“We observed three dynamics in aquaculture VC investment, catching both entrepreneurs and venture capitalists off-guard,” explains Carsten Krome, managing partner and co-founder of Hatch Blue.

“First, funding gaps for infrastructure have emerged. Many innovative ventures have now reached a scale where they require capital for first-of-a-kind facilities and venture equity is unsuitable, creating funding gaps. Now, aquaculture impact investors with conventional fund set-ups are waking up to the implications of funding infrastructure assets.

“Second, innovation in aquaculture often outpaces market adoption. Success stories, such as sea lice lasers in Norway, took 10–12 years to achieve broad adoption—too slow for most fund managers but are probably more the rule than the exception in aquaculture.

“Third, while the decline in aquaculture venture funding is stronger, it is in line with the wider VC market. Exotic VC-sectors like aquaculture are typically among the first to face cuts. We need to generate success stories, which means returning profit to our investors in our line of work by building profitable companies to exit via trade sale. We are currently focused on that and will take it from there.”

Funding by sector: re-adjustments of industry focus

Funding by deal value

2023 was the year for software (which secured 27 percent of VC funding in aquaculture, including two series D investments), supply chain and services (17 percent) and next generation farming (15 percent). Startups in these sectors secured $229 million, $146 million and $125 million respectively.

2024 paints a very different picture. Next generation farming emerged as the dominant sector, securing $295 million (48 percent of total VC funding in aquaculture). Nutrition and regenerative farming followed suit, raising $144 million (23 percent, largely through seed or series A rounds) and $48 million (11 percent, mainly through seed rounds) respectively.

RAS producers in next generation farming secured $250 million in venture funding in 2024, up from $124 million in 2023. Closed containment systems and other novel systems attracted $21 million from ventures. It’s worth noting that infrastructure or capex-heavy investment does not traditionally fall within venture’s appetite. Beyond venture funding, corporates, governments and banks invested $738 million into RAS and offshore systems, underscoring the industry’s ongoing commitment to improve production control and minimise environmental impacts.

Within nutrition, insect-based ingredients led the race, with $68 million secured, followed by single cell protein at $44 million and omega-3 oil alternatives at $26 million – emphasising the industry’s dedication to diversify the protein ingredient basket and secure alternatives to fish oil.

In regenerative aquaculture, seaweed is the new focal point, securing $46 million in funding, while bivalve farms raised $17 million, as attention increasingly turns towards climate change mitigation and ocean carbon sequestration.

Aligned with larger trends in meat alternatives, cell-based seafood and plant-based seafood experienced the largest declines in funding, decreasing by 94 percent and 87 percent respectively.

Funding by deal count

Nutrition (from 10 deals in 2023 to 15 in 2024) and regenerative aquaculture (from 9 to 13) remained the leaders in deal volume in 2024, while health and genetics (from 2 to 7) and next generation farming (from 4 to 9) saw the largest increase in deal activity. Within health and genetics, heightened emphasis on vaccine development and disease solutions, as well as breeding programmes, are increasingly important as the industry faces devastating losses from disease and parasites across shrimp, salmon, tilapia and other species. More industry alliances have been formed across regions to share learnings and address such issues.

Caitriona Kelleher, managing director of early-stage investments at Hatch Blue, highlights that these trends are also evident in their own portfolio.

“We broadly see these trends reflected in our own portfolio. One trend not obvious from the figures is the increasing number of progressive industry players who are partnering with early stage companies to leverage their innovation. This provides much needed resources for the startups and is a key lever for attracting investment funding from the wider market,” she reflects.

Funding by series: shift towards earlier-stage funding and unspecified rounds

In 2023, later-stage deals dominated by value, with series D rounds accounting for 35.6 percent of the total annual deal value. In 2024 this trend has shifted towards earlier stage deals, debt instruments, private placements and unspecified rounds.

In 2024, unspecified rounds accounted for 59 percent of the total deal value across 16 transactions, followed by 16.4 percent series A across 11 deals and 10.8 percent series B across three deals. The surge in unspecified rounds may be attributed to market downturn, as these rounds offer more flexibility for negotiation without the constraints of specific round expectations and / or may help companies avoid the stigma associated with down rounds. However, without knowing the specifics of each of these rounds, this is purely speculative..

Comparing the total raised by stage in 2023 and 2024, seed, series A and series B rounds declined by 74.8 percent, 26.7 percent and 45.4 percent respectively but capital raised by pre-seed and series A extension rounds increased by 100 percent and 82 percent respectively. In terms of the number of deals, seed and series A extension count increased from 19 to 26 and 1 to 3 respectively, whereas series A rounds declined from 16 to 11.

“The decline in larger rounds is certainly concerning, as it reduces the potential to see large exits in the next few years,” Georg Baunach, managing partner and co-founder of Hatch Blue, reflects. “But we also see opportunities. With a general decline in VC investment in the sector, funds that are currently deploying are able to build strong portfolios. The fundamentals of the industry have not changed because people will continue to eat seafood at a growing rate.”

Aligned with lower market appetite, average round sizes across majority stages declined, with the exception of pre-seed and series A rounds.

Monthly fluctuations

In 2023, deal value peaked just before the summer. In 2024, the monthly fluctuation for deal value remained relatively flat in the beginning of the year, peaked in October and tapered off towards November.

June 2024 saw the highest number of deals closed, with deal activities generally fluctuating month by month.

By region

Deal activities in Europe remained stable, with 25 deals closed in 2023 and 27 in 2024. The number of deals completed in North America jumped from 20 to 31 while APAC experienced a decline from ten to six. In Europe, nutrition was the most active sector with seven deal counts. In North America, regenerative aquaculture led, with seven deals closed.

2024: trends beyond investment

2024 was an eventful year for aquafeed development. The start of 2024 marked the reversal of fishmeal and fish oil production decline as Peruvian anchovy fishing seasons bounced back. The surge in marine ingredients and the build-up of soybean stocks provided much-needed relief from pricing pressure for aquaculture producers. The industry continued to advance on its commitment to diversify the ingredients basket, evident in both an increase in venture funding across novel ingredient startups and governments’ approval to farm genetically modified omega-3 rich Camelina crops and support of sale of GM canola in Norway and Europe. Sustainability has now taken center stage in feed discussions, with global organisations launching new feed standards (eg the ASC launched its new Feed standard), leading feed formulation software integrating LCA metrics to capture production footprint (e.g. DSM-firmenich partnered with Bestmix) and retailers now selling farmed shrimp and tilapia fed with diets containing specific ingredients.

On the regulatory front, the aquaculture industry has seen a divergence in approaches. On one side, governments are tightening control, illustrated by the Canadian government phasing out open-net salmon farming in British Colombia by June 2029 or Iceland raising taxes for salmon farmers. On the other, governments are emphasizing the essential role aquaculture can play in food security. As examples, White House National Science and Technology Council in the United States finalised a new 40-year aquaculture plan, the Australian government pledged to invest $15 million to boost Queensland’s aquaculture sector and Ireland allocated €177 million in the 2025 budget to support the seafood sector.

Looking forward

Rabobank is forecasting an increase in global finfish and shrimp production in 2025 as feed prices lower and consumer demand recovers. However, as geopolitics leans further to the right, increasing tariffs and trade restrictions may bring unexpected disruptions to the aquaculture supply chain. As 2025 unfolds, we at Hatch Blue approach the year with optimistic minds but cautious eyes, ready to ride the wave of new opportunities.

*Since our 2023 aquaculture deal analysis, we’ve added a few missed deals and adjusted how we categorised startups. Instead of $808 million invested by VC funds, 2023 witnessed $854 million capital flow into aquaculture startups from VC funds. Updated data is integrated throughout this year’s article.

**We’ve added Hatch Blue’s deals that weren’t publicly announced which contributed to the increased deal count this year.