Conversation with Johan Henriksson of Seaqure labs

Aquafeed is a $80B market growing about 5% per year. But aquafeed producers and relying on fishmeal and soy protein concentrate as their main source of protein in feeds, and this causes severe pressure on fish stocks and ocean biodiversity. Seaqure labs upcycles food side streams (that would otherwise go to waste), via solid state fermentation, into a sustainable mycelium ingredient. To learn more, I recently spoke with Seaqure’s CEO, Johan Henriksson, during TechArena in Stockholm, Sweden.

What is your background, and how did you end up founding the company?

My educational background comes from pursuing a Bsc in Corporate Sustainability in Gothenburg, Sweden at a business school. After this, I really wanted to get more hands- on experience in sustainability-related entrepreneurship, which led me to pursue a Msc in Entrepreneurship & Business Design at Chalmers University of Technology. I loved this education, and it has a very unique style of teaching. This is where the birth of Seaqure labs started, as we got to work together with cutting-edge researchers from all fields in order to find commercial potential from research within deeptech-related areas. Long story short, during this time I met with my Co-Founder Sajjad (now CTO) and Albin (COO) whom I knew very well from before. I really felt how impactful this idea could be for the agrifood industry at large scale, and decided to start Seaqure.

What’s the problem you’re tackling?

Aquafeed producers and other feed producers are currently relying on fishmeal or soy protein concentrate as their main source of protein in feeds. This causes severe pressure on fish stocks and the biodiversity of our oceans, and it contributes to deforestation of e.g the Amazon rainforest to make room for soy plantations. For example, 92% of all the herring that is being trawled in the Baltic Sea ends up as fishmeal in factories, so only 8% of these fish goes to human consumption. Furthermore, this causes problems for the feed manufacturers, as around 70% of the emissions in aquaculture comes from the feed. These ingredients also cause volatile prices, as they often are imported from around the globe, and weather events such as El Nino affect the supply each year. Simply, the need for novel, sustainable ingredients is becoming more and more important every year.

So what’s your solution to these problems?

We adress this problem by introducing mycelium-ingredients as substitutes for fishmeal or soy in feed formulations. We use something called solid-state fermentation technology to produce these ingredients using solid food side streams that otherwise end up as waste or low-value animal feed today to ferment the mycelium. We see a large interest from different sidestream producers who want to work more sustainably, as well as a strong demand for novel ingredients from large feed producers who want to introduce more circular ingredients in their aquafeed, pet food or other animal feed. What's innovative with Seaqure labs is that we can use different formulations of low value materials in a very cost-efficient production process to turn these into GRAS-safe mycelium-based ingredients.

Is there anything unique about this? Something you could patent?

We are planning to file a patent in the coming months, and our technology team has extensive know-how from their PhDs on different formulations of strains combined with different substrate combinations for specific feed applications. We have an extensive know-how on different product formulations for feed using mycelium strains essentially. We are also looking into different unique scalability options at the moment for making our production process as cost-efficient as possible.

What impact do you hope to have?

We see a huge impact from using circular ingredients such as fungi instead of traditional protein sources at scale. For each 225kg of fishmeal you produce, you need around 1,000kg of fresh forage fish from the ocean. This means that we can "save" around 4 tonnes of fresh fish from ending up as fishmeal for each ton of fishmeal being replaced with mycelium. And this is just the biodiversity impact.

Looking at the carbon impact of our product, we see that we would have a CO2-emission at scale at around 0,82kg CO2eq/kg, which is around one-third of insect meal. This would of course also be significantly lower than the emissions that come from both Soy Protein Concentrate and fishmeal production.

What’s your business model? Who is the customer?

We are still pre-revenue, as we started the company around 7 months ago, but our business model will be a B2B ingredient-based model, where we collaborate with a few sidestream partners from the food industry, who want to upcycle their waste into more high-value use, while we convert this biomass into bulk ingredients that we package and sell to the feed companies. There is currently a big shift in the industry, where we see many large feed companies wanting to introduce more and more novel ingredients into their product portfolios, and we believe that our mycelium will play an important part in that transition. Long-term, we see that we could license our technology to companies wanting to produce their own ingredients using our formulations.

How big is the market for this?

The market is absolutely massive. We have both Norway and Denmark nearby who are some of the leading countries in Europe producing aquafeed at a million-tonne scale. We also see that aquaculture is the fastest growing food industry globally right now, and our other market segment, pet food, is also growing rapidly in Europe and around the globe. As our ingredients are versatile and food/feed approved, we also have the potential of entering the alt-protein market in the future. What makes us different is that we are currently laser-focused on scaling up mycelium production cost-efficiently at scale for the aquafeed industry, using our know-how and formulations around sidestreams. We are currently producing at small/lab-scale, but are planning on how this would look like at 1,000+ ton scale since Day One.

What’s next for you, in the coming few years?

We’d need to expand our team from just 3 people to more technical expertise ranging from bioprocess engineering to lab technicians. Our first markets will likely be in Scandinavia or in Southern Europe, where aquaculture and feed has a larger market size. In the coming years, we also plan to expand and develop our product portfolio from one single ingredient to several different ones depending on the customer preferences and animal and fish species.

And you’re actively raising funding, correct?

We have only raised a small round from our University VC, and are currently raising our pre-seed round of €350K (SEK 4 million) that we will close this spring. This will enable us to scale our mycelium ingredient from lab stage to pilot stage, where we are planning to find our first product-market fit, produce and sell our first 10 tonnes this year together with partners, and finalize our scale-up plan, so that we in coming years will manage to reach 1000+ ton scale.

What asks, if any, do you have for the FoodTech Weekly Community or anyone else reading this?

Funding! We are actively looking for strategic investors who want to be part of this amazing journey to change the way we feed our food, and are therefore looking for early-stage VCs and angels.

On top of this, we are actively looking for different sidestream partners and smaller feed companies who want to collaborate on product formulations using our circular process.

How can people get in touch with you?

LinkedIn or email is the easiest!