A Tamil Nadu-based start-up, Aquaconnect, is assisting several fish and shrimp farmers from across India to increase productivity through their AI and satellite remote sensing technology. It has guided over 60,000 aquaculture farmers in Tamil Nadu, Andhra Pradesh and Odisha and is looking to scale up operations in West Bengal, north and the northeast.
“Our mobile app captures production data to help farmers improve water quality, feeding efficiency and the quality of harvest produce. We use satellite remote sensing to know dynamic, real-time information about the pond— identify whether a pond is an aquaculture pond or not, whether it is a fish pond or a shrimp pond and even find out how long the farmer has been doing aquaculture in that pond and what the date of culture is, in addition to a number of other pointers,” explained Rajamanohar Somasundaram, Founder and CEO of Aquaconnect. “We combine this ground intelligence to bring transparency in the pre-harvest value chain. Through Aquaconnect’s solutions, farmers have been able to get a better 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,” he added.
India is the largest exporter of frozen shrimp in the world and the second-largest aquaculture producer behind China. In fact, aquaculture is one of the most sustainable protein production value chains in the world. It is a $25 billion industry, where the upstream segment that includes inputs like fish feed and operating the farms is about $9 billion and downstream, which is the value generated through sales primarily, is about $16 billion. “We see enormous growth potential in this sector, especially with impetus from the government through schemes and the projected reduction in import taxes on certain aquaculture-related input products, stated in the budget,” Mr. Somasundaram said.
Fintech inclusion
Besides providing technological support, the start-up is actively helping farmers on the finance front. Aquaconnect has partnered with over five financial institutions and two insurers to accelerate fintech inclusion and risk mitigation in aquaculture. Mr. Somasundaram explained that financing is one of the major challenges in aquaculture. Banks and financial institutions have traditionally stayed away from lending, largely because of the challenges in underwriting due to the underwater nature of operations in aquaculture. “There is a lack of formal capital due to which the value chain stakeholders are borrowing at a very high interest rate, which goes up to 36% or 48%. Formal financial institutions can offer a lower interest rate, up to 12%. Our solutions provide detailed insights and data on each aquaculture pond, helping banks develop better risk mitigation strategies and, therefore, give access to low-cost capital,” he said.
Aquaconnect has raised $13 million in funding— a mix of equity and debt funding—so far. The start-up was funded by HATCH-Norway, Agritech VC Omnivore, Japan’s Rebright Partners, Flourish ventures, AgFunder, 6G Capital and Trifecta Capital. Aquaconnect was among seven start-ups from Tamil Nadu which visited Davos in May along with the State government officials, in the backdrop of the World Economic Forum’s annual meet that happened last month.
