Cod farming venture raises EUR 10.5m to build up biomass
Friday, February 21, 2020, 10:20 (GMT + 9)
Norwegian cod-farming venture Norcod has successfully raised new investment totalling NOK 105m (EUR 10.5m) in its ambitious journey to become the world's leading producer of responsibly farmed cod on an industrial scale.
The company launched a contemplated private placement with a subscription period running from 31 January to 5 February. The cash was raised among new and existing investors from both Norway and Denmark. Sparebanken 1 Markets helped facilitate the transaction.
Several subscribers indicated they will continue to support Norcod in future funding rounds. “This is extremely encouraging as it's imperative for us to have a strong backbone of investors who recognize the value of the business and our efforts,” said managing director Rune Eriksen.
The 13 Norwegian investors hail both from Trondheim, where Norcod is headquartered, and Oslo. Many are already involved in aquaculture, which testifies to robust local backing and belief in the venture by industry experts.
“It's a major success for Norcod,” said Eriksen. The company is targeting a harvest volume of 9,000 metric tons (MT) of fresh cod in 2021, scaling up to 30,000 MT in 2025 as it adds new facilities.
“The investment helps us reach our earnings goals, as well as our vision to help feed the global population through the production of sustainable, healthy protein,” Eriksen said. “We want to contribute to food security and protecting the planet.”
Norcod will use the net proceeds to invest in access to juveniles and build-up of biomass. The first batch of juveniles was transferred to the sea in January.
“The first 200,000 fish are doing even better than expected, with much lower mortality than budgeted but faster growth,” said Eriksen. These key factors were part of the problems that afflicted the last attempts at commercial cod farming a decade ago. Things have changed radically since then; the fry are of much higher quality with hugely improved characteristics, in addition to new technology.
“Progress is fantastic and a great indication that Norcod can become a major success story. At the same time we've put the next 1.8 million fry into the growth phase with our partners Mørkvedbukta and EcoMarine. That's also going well,” said Eriksen. The company's next batch of juveniles is slated to enter the sea in June. “The Norcod team is expanding and we're all very excited,” Eriksen added.
Danish investors already showed their strong interest in Norcod by raising DKK 28.5m (EUR 3.8m) through Artha Kapitalforvaltning in November. Their enthusiasm was evident in that investment being fully subscribed in just one hour, according to Artha director Jan Severin Sølbæk. Artha is also a signficant investor in the latest equity raise, and the response was just as fast.