Aquaculture and alternative seafood catalyst HATCH is backing SmartOysters to make waves within the aquaculture industry and beyond.
Australian startup SmartOysters has been accepted into HATCH's competitive Accelerator Program. In order to make the grade, a startup has to show that it has "innovative and scalable solutions for relevant aquaculture problems."
HATCH managing partner and co-founder, Georg Baunach says the fund was created because there was a need for innovation in the aquaculture space. The company makes a point of keeping track of most startups in the industry and he was impressed when he met SmartOysters founder Ewan McAsh at the AgriFutures Evoke conference in 2020.
"What we really liked was Ewan's background. Being an oyster farmer himself and also being involved in the sales and distribution was very appealing for us. Ewan is very motivated and aware of his customers' needs, which is probably the most important thing for a business," Georg says.
"SmartOysters is taking a slighting different approach to technology compared to other startups out there. It has the ability to go beyond the operations and management of the farm into the other values for the farmer, such as helping farmers access capital."
As part of the Accelerator Program, HATCH invested US$130,000 into SmartOysters, but it goes further than just monetary assistance.
"We invest a small amount to start with and the follow-on investments are based on their needs, depending on their capital requirements and the traction they achieve," Georg says.
"The Accelerator Program provides support to help startups grow their business. We spend a lot of effort on everything from helping with a business plan to value proposition to IP strategy to development plans.
"The biggest benefit is that we connect them with the industry. We have databases of farmers and connections throughout the supply chain that we can tap into and a network of investors globally that are interested in aquaculture deals. It's a very specific network. Not a lot of VCs (venture capitalists) are comfortable investing in aquaculture so we connect them to those that are, and a variety of other stakeholders.
"During the program, mentors work with businesses on specific topics, from aquaculture to entrepreneurship. We look at it as the onset of a long-term relationship and hope to invest more later."
Not all of the companies in the Accelerator Program become eligible for more investment, but Georg believes Covid-19 has shown that SmartOysters has great potential.
"We met them before the crisis and have been able to see how they handled the situation. They're very customer-focused, the numbers in terms of retention rates definitely speak for themselves, the old customers felt very supported and new customers are signing up," he says.
"That's all very important and a good sign."
While SmartOysters was created specifically for oyster farmers, Georg sees potential to expand to other industries.
"We were thinking with Ewan, what is structurally similar to what they are working on right now? The approach is to optimize the value to customers in the existing industry, mussels is the next logical avenue, then grow outside of aquaculture," Georg says.
"Entrepreneurship is about smart decision-making, don’t just follow the narrative. We are excited to get cracking and work with them to grow their business."