A DUNDEE-based company which develops technology for fish farms around the world is preparing to launch its next investment round.
Ace Aquatec has expanded its global presence in the last year, opening divisions in Norway, Chile and North America to augment its office in Australia. This came on the back of investment from Scottish entrepreneurs Chris van der Kuyl and Paddy Burns, best known as the founders of gaming developer 4J Studios, and Netherlands-based Aqua-Spark, the aquaculture investment fund.
The investment has allowed the company to expand its range of research and development (R&D) projects and products, while switching from a sales to product rental model internationally.
The change to a subscription model is designed to increase monthly recurring revenues by renting systems such as predator deterrents and 3D cameras, which helps fish farms deliver the precise weight of fish that their customers order. It has also developed an “humane” in-water electric stunner, which is designed to reduce the stress from fish during the harvesting process.
Having grown its headcount to nearly 30 from five in the last year, Ace Aquatec is now in talks about further funding to continue its expansion drive.
“Our focus is on uplifting our monthly recurring rental revenue as we pushed towards our next investment round, which we are aiming for Q1 next year,” said Nathan Pyne-Carter, who has been chief executive of the company since 2011.
“So our drive is to triple our monthly recurring rental revenue – that is our key goal – over this year. We are on target [and] we are going in the right direction on that. And as a consequence, that means to lower our sales and shift the model internationally to that worldwide rental model and subscription service.”
The company is aiming to raise more in its next investment round than it did in its first fund-raiser. Mr Pyne-Carter said it was now receiving unsolicited approaches from potential investors, and noted that the company also has connections with Aqua Spark’s investor base of around 2,000, who invest in its blue growth fund.
“At the moment, we’ve got two investors in Aqua Spark’s fund we are talking to directly,” he said. “And we have got links again through Chris van der Kuyl and his connections in business, which again we are talking to.
“We’d be hesitant to say any particular names at this point, but they are significant investment funds that are in the same sort of space – investing in aquaculture, some of them in renewables and some already closely linked to our company that are operating in a similar space to us.”
One group of investors whom Mr Pyne-Carter will be not talking to are venture capitalists, having concluded that their model does not “gel” with his own ambitions when earlier talks were held.
“I knew I wanted to grow the business,” he said. “I knew we wanted to become more international. I knew we had a slate of very exciting R&D projects – there is something like 25 R&D projects ongoing at the moment, a lot of them coming through towards the end of this year. To be honest, I didn’t want to let that go and retire on an island somewhere with my pina coladas. I actually wanted to stick with it and see it through. I have got plenty of ideas that I want to keep putting into this.”
He added: “When we are looking for investors in this round, we are looking for a similar outlook on the horizon. And we really like the timescale that Aqua-Spark and they the way they are looking for a return from investors via the dividend model. You have got longer-term goals, you are not making decisions on a pin-head, all with a view to selling it on in a few years’ time.”
He refused to rule out an eventual stock market flotation for the company.
“Beyond that, we might be looking for an IPO (initial public offering) in future,” he said. “I think we will just keep our ear to the ground on that and consult with our investors.”
Mr Pyne-Carter highlighted the support given to the business over the years by government grants and advice, for example through the Smart R&D fund, Innovate UK, Business Gateway and Scottish Enterprise, which have helped him get new products off the ground, especially in the early days.
More recently, he cited the grant provided by CEFAS (Centre for Environment, Fisheries and Aquaculture Science), which completely funded the development of ideas such as the company’s AI underwater cameras.
Products developed by Ace Aquatec with grant funding include a water-jet bleeder, which cuts the aorta of the fish with robotic arms. It has developed AI systems which identify wildlife around farms such as seals, and underwater biomass camera and lighting systems, which use AI to track metrics such as fish weights and disease. The company has also designed a contactless pump, allowing the company to offer a “pump, stun and bleed” solution to clients around the world.
“Clearly, the Scottish ministers and the organisations handing out those funds, they understand the importance of trying out new ideas, and letting small companies do that,” Mr Pyne-Carter said. “Because I think often you can get these big companies applying for grants ad it gets lost in the mechanisms of that big company. For a small organisation it is absolutely critical and can be defining for that company.”
He added: “In just one year, we have gone from five to nearly 30 individuals. That just wouldn’t be possible without those early commitments to our R&D slates. It really pays dividends.”
Mulling the outlook, Mr Pyne-Carter is excited about the future growth potential for both Ace Aquatec and aquaculture in general. “We are just scratching the surface on where we are going to be with a lot of these industries,” he said.
What countries have you most enjoyed travelling to, for business or leisure, and why?
Greece. The weather and hospitality stand out, but also the scale of the problems needing to be addressed. It’s a country with huge growth potential and as more investment pours in, there’s big opportunity for fish farming technology providers to support that sustainable development story.
When you were a child, what was your ideal job? Why did it appeal?
We travelled around a lot as children, with my formative years living in Botswana. My mother is very creative, and my father was more strict, and managed to instil a belief in hard work, fighting on even in the face of adversity. My father was car obsessed, and somehow we all believed we would by rally drivers or racing drivers. After leaving University I was pursuing my creative dreams, writing screenplays, but I took up the mantle of the family business in 2012 – and have never looked back – because it fulfils everyone: creativity, passion for technology and a drive to a better future!
What was your biggest break in business?
The biggest break in business was our first investment round with AquaSpark and later 4JStudios – this begins a completely new business journey, with support, ambition, and a group of like minded individuals (from investors, management team and employees), drawn to an exciting environment that champions creativity, responsible practices and a desire to change the world.
What was your worst moment in business?
The worst moment in business was when I first decided to take on the CEO role at Ace Aquatec, taking over from John Ace-Hopkins who had died sadly of a heart attack in 2011. Knowing very little about how the early products were put together and barely a thing about fish farming or how to run a business – it was an extremely steep learning curve. But I thank our early customers for having faith in us, and the Scottish government support that was available through HIE, Business Gateway, and Scottish Enterprise, that have been critical throughout.
Who do you most admire and why?
There are certainly companies I admire – like Apple, Amazon and Tesla – though the individuals behind them are often less admirable for one reason or another than what they have managed to create. If I’m allowed to deviate from business for a moment, my highest admiration can be pinned on Sir David Attenborough – he has been our companion on the television since I was a boy and his insights and call to action have always been ahead of anyone else.
What book are you reading and what music are you listening to?
I’m forced to listen to Pink every morning because my four year old boy is obsessed. But if I had a choice it would be Kings of Leon. Reading – though I rarely get time these days – would be a classic like Steinbeck – they still capture with poetic ease a unique place and time which is always immersive and moving.