The Chennai-based company offers real-time, tech-based farm-monitoring solutions, consultations, aquaculture expertise, and export market access to coastal farmers. Aquaconnect claims to have grown 15x in revenue and has raised $4 million in pre-Series A from Omnivore, Rebright Partners, Flourish Ventures, AgFunder, Hatch Blue, 6G Capital. Last month, Aquaconnect raised Rs 60 crore in a venture debt funding round led by venture debt firm Trifecta Capital.
“We are currently operating in three states in India – Tamil Nadu, Andhra Pradesh and Odisha,” Somasundaram said. “With our latest fundraise, we are looking to expand into other geographies such as West Bengal and Gujarat. We are looking to improve our aqua partner numbers to about 1000 by the end of this year. Currently, we have about 150 so we will be growing about 7x of that which means we’ll be able to serve close to 150,000 fish and shrimp farmers in India.”
He said the company is adopting a risk mitigation strategy that is called “boots on the ground and eyes in the sky.” With this technology solution, Somasundaram said that Aquaconnect can identify whether a pond is an aquaculture pond or not, whether it is a fish pond or a shrimp pond and can even find out how long the farmer has been doing aquaculture in that pond and what is the date of culture in addition to a number of other pointers. Through Aquaconnect’s solutions, he said farmers have gotten better value realization for their produce by 5-10%
“With this, we are able to come up with stronger business use cases, something like now the feed producing company can understand what is the demand and the buyers can now understand where they can buy the shrimp or fish using the data satellite remote sensing. And finally, the data insights for the financial institutions can be provided,” he said.
He said that this provides underwriting capabilities for the bankers and financial institutions to lend credit products to the farmers, input retailers and buyers. Somasundaram said that financing is one of the major challenges in the aquaculture value chain and despite it being a multi billion dollar value chain, banks and financial institutions are staying away from the opportunity largely due to the challenges in underwriting.
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“There is a lack of formal capital and because of that, the value chain stakeholders are borrowing at a very high interest rate which can go up to 36% or 48% interest,” he said. “Formal financial institutions can offer a lower interest rate which can be up to 12% or 15%,” he said. “With our deeper integration with the farmer network as well as the buyer and retailer network, we are now able to bring in certain transparency in this value chain. So with this transparency, we will be able to bring in better risk mitigation for financial institutions.”
He added that the company has partnered with over five financial institutions and two insurers to accelerate fintech inclusion and risk mitigation in aquaculture. All in all, Aquaconnect has assisted over 60,000 aquaculture farmers with a 5x increase over the last 12 months, he said.
