Norwegian land-based start-up Smart Salmon aiming for IPO

Smørhamn, Norway-based Smart Salmon is set to join the land-based salmon farming revolution in Norway.

Smart Salmon’s ultimate aim is to produce 50,000 metric tons (MT) of salmon raised in recirculating aquaculture system (RAS) facilities in Norway and France by 2029.

The company is looking to raise private capital for the project before seeking an initial public offering (IPO) in the second quarter of 2021.

According to a Smart Salmon presentation, the company initially hopes build a 7,500-MT flexible farm as part of a major fish farming cluster on the northwest coast of Norway, producing 2,500 MT of large smolts up to 0.5 kilograms in weight, and 5,000 MT of harvest-weight salmon. The company estimates total capital expenditure for the project at NOK 350 million (USD 40.5 million, EUR 33.6 million) for the smolt plant and NOK 600 million (USD 69.4 million, EUR 57.7 million) for the  land-based salmon farm. Construction is expected to start in Q1 2021, initial production to commence a year later in Q1 2022, and the first 500-gram smolts will be available for sale in Q1 2023.

In its private capital raise, the company is seeking between NOK 25 million and NOK 80 million (USD 2.9 million and USD 9.3 million, EUR 2.4 million and EUR 7.7 million), with a pre-money valuation set at NOK 75 million (USD 8.7 million, EUR 7.2 million). Its second stage of fundraising includes a listing on the equity trading market Euronext Growth in Q2 2021 in order to raise a further NOK 150 million to NOK 250 million (USD 17.3 million to USD 28.9 million, EUR 14.4 million to EUR 24 million).

Smart Salmon was founded by brothers Ole, Petter, and Stig Bakke, who serve as CEO, chairman, and a company board member, respectively. The brothers are experienced salmon and cod farmers and, in the company’s presentation, said they believe that land-based farming offers exciting potential. The company has partnered with RAS specialist AquaMaof, after being convinced the firm’s technology would work for its plans, following a visit by the Bakke brothers to the company's research facility and additional trips to Aquamaof-designed land-based salmon, tilapia, catfish, and sea bream facilities in Poland, Russia, Slovakia, and Israel.

According to Smart Salmon’s presentation, salmon farmers are already realizing the potential benefits of using larger smolts for at-sea transfer in terms of reduced biological issues, such as reducing sea-lice infestation and achieving faster growth time to harvest. As a result, average smolt size in Norway is expected to increase significantly over the next few years, with farmers looking at the possibility of increasing the size of their smolts to one kilogram.

The company is also keen to make the most of an opportunity to be a first mover into the French market with the construction of a land-based production site in Brittany. An agreement has been made with the municipality in Guingamp to buy 100,000 square meters of land for NOK 15 million (USD 1.7 million, EUR 1.4 million), where the company hopes to build a 10,000-MT plant to produce harvest-size salmon. The final license and building permit are expected in Q2 2021.

Producing salmon in France would provide a saving of NOK 3.00 (USD 0.35, EUR 0.29) per kilogram in freight cost compared to transporting it from Norway. France is the second-largest market for farmed Atlantic salmon in the world, and French consumers are willing to pay a premium price for domestically produced products, Smart Salmon noted in its presentation.

Photo courtesy of Smart Salmon