Chaseman Spotlights

Vertical Oceans

Making waves in global aquaculture

As part of an ongoing series, Chaseman Global shines a Spotlight on the agricultural innovators who are making a positive impact on the future of our planet.

In this edition, we dive into Vertical Oceans, a fast-growing technology startup that has designed a never before seen sustainable aquaculture system making waves in the $50 billion shrimp industry.

We're a very different flavour of vertical farming. So in the vertical farming segment, most companies are focussed on greens such as lettuce. We're producing an animal protein in a highly automated vertical farming environment - that's really unique in the vertical farming sector. So, our view is that we're opening up new investment themes and changing the definition of some of these sectors in terms of how they're viewed from a technology or product perspective.

John Diener

CEO of Vertical Oceans

At vertical oceans, we hope to trigger a shift in the way aquaculture and agriculture, in general, are managed, making them more data and algorithm-driven sectors.

Enzo Acerbi

Co-Founder of Vertical Oceans

Who are Vertical Oceans?

Located in downtown Singapore, a hub for aquaculture innovation, Vertical Oceans is a technology company implementing vertical aquaculture to cultivate shrimp through its sustainable and scalable model.

CEO John Diener first came up with the idea to startup Vertical Oceans in 2016 after becoming frustrated with traditional farming methods used within the aquaculture industry. His mission was to utilise indoor vertical farming to produce fresh seafood in a way that delivers good quality shrimp without the need for chemicals or antibiotics, nor the need to exploit or further pollute the oceans. 

After a few years of planning and developing a concept, John went on to found Vertical Oceans in mid-2020. Shortly after, John was joined by co-founder Enzo Acerbi, whom he had worked with at a previous company. 

The pair both saw the potential of their farm-to-fork concept and set out on their journey to bring the healthiest and most sustainable seafood protein to the global market.

"I joined Vertical Oceans because I believed in the vision that technology could make animal protein production highly sustainable and efficient, resulting in a healthy and nutritious product. In particular, I believe that aquatic ecosystems for aquaculture are far from being fully understood and are currently managed in suboptimal ways. I saw the opportunity to bring value to a field that historically has been a slow technology adopter and long relied on inefficient and unsustainable practices."
- Enzo Acerbi, Co-Founder of Vertical Oceans

The Deeper Problem

In 2016, John was the CEO of an aquaculture nutrition and genetics company. Part of John's role involved visiting various shrimp farms across Asia. What quickly became apparent to John was that the industry he was so heavily involved in lacked sustainability and was negatively impacting the planet's oceans, environment, and the health of the global population.  

Within these aquaculture farming applications, John saw farmers dump raw effluent into the ocean. These farmers would then even use some of that same polluted water in their farming processes, in a vicious cycle that often resulted in disease. Some farmers even started using antibiotics in their ponds. 

Having been a consumer of these farmed shrimps, cultivated through unstainable means that used antibiotics, John questioned the impact this was having on our oceans and his own family's health. Knowing that something had to and could be done to make shrimp farming more sustainable and healthier, John got to work on his own vertical farming solution. This solution would quickly shift the tides of the aquaculture and agribusiness space.

 

I kept seeing the same pattern over and over again where they'd (aquaculture farmers) be dumping raw effluent into the ocean and then bringing some of that same water back into their farm, and that led to diseases. And some farmers started using antibiotics and it just all goes downhill from there. It really bothered me to see that general neglect of the ocean. But I was also a bit frustrated and had some cognitive dissonance because I know that aquaculture is a really efficient and sustainable food production model when it's done right.

John Diener, CEO of Vertical Oceans

Vertical Oceans’ Sustainable Solution

John set out to improve shrimp aquaculture, combining their technical knowledge and experience within the industry. Venturing into new waters, of what some would consider going beyond the reaches of aquaculture, the pair took inspiration from aerospace, nanotech and other sectors when constructing the concept of their vertical farm. 

Although their mission was solely to improve shrimp aquaculture, the pair would reinvent the wheel with a new and sustainable vertical farming model. 

This unique model involves growing shrimp in large school-bus-sized modules they call the Intelligent Habitat or iHAB for short. 

These iHAB modules can be stacked in a tower as high as 40m and are autonomously controlled by sensors, AI algorithms and software. Their fully enclosed and insulated system is designed to be location agnostic. They can be easily built and incorporated into buildings within urban locations to supply major cities anywhere in the world. Additionally, as the conditions to cultivate the shrimp can be replicated all year round, Vertical Oceans can supply the market 365 days a year.

Within the iHAB lives a complex aquatic ecosystem, including the cultivated shrimp and other species. They contribute to the different levels of the food chain in what is known as multi-trophic aquaculture.

To put this into context, the shrimp feed off Vertical Oceans' own developed feed, and then any waste, be it uneaten feed or faeces, is filtered out by other species. Any other waste products, micronutrients like nitrogen by-products, are then absorbed by a seaweed Vertical Oceans has in the system. So, why this approach?

Using a multi-trophic process is as close as it would be to growing shrimp in their natural habitat. It replicates what happens in nature. What's more, as the water is being filtered out naturally by the different species within the iHAB, there is no waste, no need for chemicals or antibiotics and 100% of the water is recirculated.

John Diener

We're trying to work with nature rather than force it into something different. (...)We don't discharge any effluent from our facility. We don't use any chemicals or antibiotics in our process. We focus on trying to protect the ocean and producing an aquaculture product, which is really high quality and very healthy and with a minimum amount of our resources going into it.

John Diener

CEO of Vertical Oceans

In these controlled conditions, a batch of shrimp can be grown in just 60-70 days, half the rate of naturally caught shrimp. For example, vertical Oceans' concept facility in Singapore delivered ten shrimp harvests in 2021 alone. 

As the model can be easily scaled up or down, Vertical Oceans can supply as much as a thousand tonnes of shrimp per year or as little as about 35 tonnes of shrimp per year. It all depends on the local market customer demand. The word 'local' is essential for distribution and sustainability. 

Vertical Oceans' business model is to sell into the local market, which is currently Singapore, although global expansion is on the horizon. Their customers are direct-to-consumer or commercial customers like restaurants and food retailers. 

The shrimps are never frozen, only deep-chilled to ensure the freshness and quality of the product - a challenge in its own right. However, distributing fresh products is never easy. So Vertical Oceans created its own 'last-mile' cold chain platform with a lack of cold-chain logistics providers in Singapore to support distribution. 

Their platform allows them to deliver straight to their customers' doors within hours of harvesting, eliminating the thousands of food miles of frozen shrimp which helps keep their carbon footprint low.  

"I knew I was going to have to get my hands dirty, but it was literally blood, sweat and tears in the early days - there’s a few bloody handprints on the container office I built at the site during COVID."

- John Diener, CEO of Vertical Oceans

 

Before he could acquire a team of people, including that of co-founder Enzo, primarily due to the pandemic, John was a one-person team, literally building Vertical Oceans from the ground up. 

“For the first couple of months, I was by myself. So I went from being a C-suite executive to hand-building devices and glueing PVC pipe."

The efforts, innovation and potential of Vertical Oceans soon gained the attention of some significant investors - a massive boost for the startup company. 

 

$4 million investment

In 2021, SOSV, a US-based global venture capital (VC) firm, held their IndieBio accelerator - a programme allowing innovators within Agri and biotech to accelerate and pitch their company. After hearing the demo from Vertical Oceans, Silicon Valley VC fund Khosla Ventures and SOSV granted the Singapore startup a $4 million investment.

“As far as we know, that was the first time that a major Silicon Valley VC fund had invested in an aquaculture company. And that shows  that aquaculture can be an excellent investment case for major Silicon Valley funds.”
John Diener, CEO of Vertical Oceans

With the investment Vertical Oceans was able to move into their facility in downtown Singapore, where they began building full-scale prototypes of their bespoke iHAB. In addition, John and Enzo were able to use the funding to grow their team to 20 people. These individuals have been crucial to the company's evolution and share the mission around sustainability, as John emphasised.

"The reason we're able to make the progress that we've made is because of the people - they believe in the mission. Everybody here is sustainability focused. They get it. They're really motivated and excited about what Vertical Oceans is all about.”

How is Vertical Oceans making an impact?

“Our product is intended to replace wild-caught shrimp. So if we can replace that, we can take the pressure off of wild stocks of shrimp and nature.” - John Diener, CEO of Vertical Oceans

As the global population increases, the demand for food does too. Something Chaseman Global are striving to support - is combatting the 2050 food crisis. Vertical Oceans' innovative solution is undoubtedly helping to feed the planet in a sustainable and scalable way, impacting both the growing population and the future of the Earth's oceans and the wider environment. 

Vertical Oceans also contribute to Singapore's 30 by 30 initiative, whereby the nation aims to have 30% of its food locally sourced by the year 2030.

Not only has the startup's impact gained attention from Silicon Valley investors, but Vertical Oceans was also named one of the "Greatest Innovations of 2021" by Popular Science - further establishing the great work they continue to do. An exciting future awaits.

 

Enzo Acerbi

Vertical Oceans was conceived around the idea of sustainability. Sustainability is at the core of Vertical Oceans' value proposition. Achieving efficiency but compromising sustainability would equal solving one problem by creating a new one, so we are absolutely clear that system efficiency and sustainability go hand in hand at Vertical Oceans.

Enzo Acerbi

Co-Founder of Vertical Oceans

What does the future hold for Vertical Oceans?

“Our vision is to have a Vertical Ocean in every major city in the world.” - John Diener, CEO of Vertical Oceans

In June 2022, Vertical Oceans will start engineering their first commercial-scale facility, with construction expected to begin in the first half of 2023 - the location of this facility is a closely kept secret for now. 

Over the next few years, the company aims to have three to five Vertical Oceans facilities operating. In the next five to seven years, they aim to increase this number significantly. The market demand is there, so in the not too distant future, your city could be welcoming its own Vertical Ocean. 

John noted that Vertical Oceans will likely explore the cultivation of other seafood products in the future. This innovation may begin with commercialising the seaweed they use and grow in their shrimp vertical farming process. This seaweed is a Japanese delicacy referred to as 'Umibudo', also known as Sea Grapes or Green Caviar.

"The world is shifting towards sustainable local food production and food safety models. Vertical Oceans is at the forefront of a movement that is inspiring everyone who believes in healthy, locally-grown and sustainable seafood available everywhere, at any time." - Enzo Acerbi, Co-Founder of Vertical Oceans

It’s inspiring to see how far John, Enzo and the Vertical Oceans team have come in such a short space of time, and they have no intention of slowing down.

We at Chaseman Global would like to thank Vertical Oceans for speaking to us, and we look forward to seeing their progress as they look to expand across the globe.

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