Aquaconnect, a Tamil Nadu-based start-up, is using AI and satellite remote sensing technologies to help many fish and shrimp farmers throughout India enhance output. It has assisted over 60,000 aquaculture farmers in Tamil Nadu, Andhra Pradesh, and Odisha, and plans to expand operations in West Bengal, the north, and the northeast.
"Our smartphone app gathers production data to help farmers in improving water quality, feeding efficiency, and harvest produce quality." We use satellite remote sensing to get dynamic, real-time information about the pond, such as whether it's an aquaculture pond or not, whether it's a fish pond or a shrimp pond, and even how long the farmer has been doing aquaculture in that pond and what the date of culture is, among other things," said Rajamanohar Somasundaram, the company's founder and CEO.
"We add transparency to the pre-harvest value chain by combining this ground knowledge. Farmers have been able to gain a greater value realisation for their produce by 5-10% and save up to $50,000 per acre for culture with a 5% reduction in the cost of feeding thanks to Aquaconnect's solutions," he added.
India is the world's largest exporter of frozen shrimp and the second-largest aquaculture producer, behind only China. Aquaculture is, in reality, one of the world's most sustainable protein production value chains. It's a $25 billion business, with the upstream section accounting for $9 billion in inputs like fish feed and operating the farms, and the downstream part accounting for $16 billion in value gained mostly via sales. Somasundaram remarked, "We see huge development potential in this industry, especially with government encouragement through programs and the planned decrease in import duties on some aquaculture-related input items, as noted in the budget."
Fintech inclusion
In addition to offering technology help, the start-up is actively assisting farmers with their financial needs. To promote fintech inclusion and risk mitigation in aquaculture, Aquaconnect has worked with over five financial institutions and two insurances. One of the major challenges in aquaculture, according to Mr. Somasundaram, is finance. Banks and financial institutions have typically stayed away from aquaculture funding, due to the difficulties in underwriting posed by the industry's underwater nature.
"Because of a shortage of formal capital, value chain stakeholders are forced to borrow at extremely high interest rates, which can reach 36% or 48%." Formal financial institutions may be able to provide lower interest rates of up to 12%. "Our solutions provide detailed insights and data on each aquaculture pond, helping banks in developing superior risk mitigation techniques and, as a result, providing low-cost capital," he explained.
Aquaconnect has so far raised $13 million in funding, which is a mix of equity and debt. HATCH-Norway, Agritech VC Omnivore, Japan's Rebright Partners, Flourish Ventures, AgFunder, 6G Capital, and Trifecta Capital all contributed to the start-up. Aquaconnect was one of seven Tamil Nadu start-ups that visited Davos in May with state government officials in the run-up to the World Economic Forum's annual meeting last month.
