Village Capital has announced its latest investment in Aquarech, a Kenyan agtech startup that enables small and medium-sized fish farmers to become more productive and profitable.
Nairobi, Kenya (9 July, 2024) – Village Capital has announced its latest investment in Aquarech, a Kenyan agtech startup that enables small and medium-sized fish farmers to become more productive and profitable by providing them with access to quality fish feed, credit, and buyers.
This investment comes from Village Capital’s Reducing Inequalities Investment Facility, backed by FMO’s MASSIF Fund, established to support financial inclusion by supporting innovative financial solutions and inclusive businesses.
Founded in 2019 by father-son duo David and Joseph Okech, as well as James Odede, Aquarech is a digital platform for small and medium-sized fish farmers. As natives of Kisumu, home to Lake Victoria – the largest lake in Africa and the world’s second-largest freshwater lake –all three founders were exposed early on to the challenges of fish farming. David grew up in the fish farming industry and has direct experience in many areas of Aquarech’s business, including establishing and running a caged fish farm in Lake Victoria. Joseph is an agricultural economist with over 40 years of experience, and James is the founder of healthtech startup MobiDawa and LakeHub (an innovation hub and entrepreneur support organization that runs an incubator and digital academy). With their combined experiences and deep understanding of the business, the trio established Aquarech, a one-stop platform catering to the aquaculture needs of the fishing industry.
In the regions surrounding the African Great Lakes, many residents in lakeside communities depend on fisheries for their livelihoods, either directly or indirectly. Fish play a crucial role as a source of sustenance and income across these areas. Lake Victoria alone sees an annual fish catch of about 1 million tonnes, with the fishing sector employing roughly 2 million individuals near the lake. This industry sustains the livelihoods of approximately 40 million people across East Africa. Yet, overfishing, pollution, and climate change, combined with naturally occurring changes, have led to a significant reduction in fish quantities in the lake, disrupting the livelihoods and fishing industry in the region. Aquaculture is viewed as a viable option for closing the growing gap between fish demand and its supply. However, due to the industry’s heavy dependence on lake farming, aquaculture farmers face challenges such as the absence of high-quality fish feed, inadequate farming practices, limited access to structured markets due to reliance on middlemen, and a lack of access to capital.
Aquarech fills many critical gaps, operating both B2B and B2C verticals. Through their B2B services, they support farmers with access to quality feeds and credit using a buy now, pay later (BNPL) model where qualifying farmers can purchase inputs from Aquarech on credit. In addition to the above, Aquarech provides training and other precision agriculture tools that help fish farmers learn about best practices and improve incomes. As part of its B2C services, the startup mitigates the market access gap by purchasing fish directly from farmers and selling directly to consumers through its Fish Delis (Aquarech-owned distribution kiosks).
“An inclusive and sustainable aquaculture food system in Africa depends on how many small and medium-sized fish farmers we can transition to profitability,” stated Dave Okech, Co-founder and CEO of Aquarech. “This fund enables us to achieve this by bringing high-quality extruded floating pelleted fish feed with better feed conversion ratios directly to the farmers' doorstep, supported by a credit platform and market linkages. With this intervention, we are transitioning farmers to profitability.”
“Aquarech presented a compelling case for the Reducing Inequalities Fund, showcasing its potential to enhance livelihoods for fish farmers and generate employment for women and youth in rural areas,” remarked Heather Matranga, VP of Impact Investments at Village Capital. “This company, which really sits squarely at the intersection of climate resilience and economic mobility, is aligned with our mission to support emerging impact leaders tackling rural inequality. The founders of Aquarech have a combination of lived-experience and nuanced understanding of the problems fish farmers face, as well as the business acumen and creativity to solve these problems.”
In addition, Aquarech is promoting gender inclusivity in the sector: 35% of the 2,000 fish farmers they work with are women. The startup is also focused on providing stable job opportunities for women, particularly in its distribution kiosks, which it intends to scale with its recent capital raise.
For more information on the Reducing Inequalities Initiative Fund and our portfolio companies, contact Husein Merchant at Village Capital (husein.merchant@vilcap.com).
About Village Capital
Village Capital is reinventing the system to back the entrepreneurs of the future. Known for its groundbreaking approaches to supporting founders who are building solutions to emergent social, economic, and environmental challenges, VilCap unlocks critical social and financial capital for early-stage companies to maximize business and impact growth.
Village Capital has operated in sub-Saharan Africa since 2012, running over 14 accelerator programs serving entrepreneurs in 15 countries in the region. VilCap has supported more than 120 locally-based startups and 78 Entrepreneur Support Organizations (ESO) working in sectors such as financial health, hardware, sustainability, and the future of work. Learn more at www.vilcap.com and follow @villagecapital.
About FMO
FMO is the Dutch entrepreneurial development bank. As a leading impact investor, FMO supports sustainable private sector growth in developing countries and emerging markets by investing in ambitious projects and entrepreneurs. FMO believes that a strong private sector leads to economic and social development and has a 50+ year proven track-record in empowering entrepreneurs to make local economies more inclusive, productive, resilient and sustainable. FMO focuses on three sectors that have high development impact: Agribusiness, Food & Water, Energy, and Financial Institutions. With a total committed portfolio of EUR ~13 billion spanning over 85 countries, FMO is one of the larger bilateral private sector development banks globally. For more information: please visit www.fmo.nl
