American Unagi has raised $10 million as it breaks ground on the country’s first indoor aquaculture facility to grow Maine glass eels to market size.
The company, which Sara Rademaker started in her basement in 2014, recently started construction on a 27,000-square-foot eel aquaculture facility in Waldoboro, Maine. The recirculating aquaculture system facility will be the first eel aquaculture facility of its kind in the United States, according to the company.
The $10 million in financing is composed of $4.4 million of Series A preferred equity and $6.6 million of debt financing. Local Maine investors, including members of the Maine Angels, Maine Venture Fund, Coastal Enterprises, and other high net-worth individuals, provided the equity investment. Gorham Savings Bank and the Finance Authority of Maine provided the debt.
“We are fortunate to have the backing of some very strong financial partners that not only allows us to develop a cutting-edge facility, but to align us with strategic partners for future growth,” said John Pavan, the company’s executive vice president. “We are positioning American Unagi to be a model for sustainable land-based aquaculture and serve a significant portion of the U.S. market.”
American Unagi is the latest ocean-related company to raise capital. Last month, True Fin raised a $1 million seed round to expand its ecommerce business selling premium fish from the Gulf of Maine to home chefs and restaurants. In June, another ocean-related startup, New England Marine Monitoring, was acquired by an investment company that plans to fund the company’s expansion.
American Unagi has come a long way since MSI first covered the company in 2017. At that time it was operating out of the Darling Marine Center’s Aquaculture Business Incubator in Walpole and was selling its eels, commonly referred to as unagi on menus, to restaurants in New England.
It currently operates out of the Center for Cooperative Aquaculture Research in Franklin and has five full-time employees. The company has consistently doubled its production of eels year over year. Next year, as operations expand, the company plans to hire an additional nine employees.
The new facility in Waldoboro will expand the company’s annual production to over 500,000 pounds, which is approximately 5% of the total U.S. market for eels, according to Rademaker.
“I carefully chose this size as it appropriately balances the initial infrastructure costs with future growth prospects in order to make it an attractive investment,” Rademaker said. “Eels are high-value fish, therefore, the facility does not have to be large to be profitable.”
American Unagi purchases baby glass eels (known as elvers) from Maine fisherman and raises them in a custom-designed indoor aquaculture system until they are market size. The food blog Eater recently visited the company’s pilot facility and published a video about how the eels are harvested, raised, and eventually processed for sale. Rademaker explains that she can raise eels to market size in only seven to twenty four months, as compared to up to 30 years in the wild.
“Our eels are happy, so that way they grow the best and taste the best,” she said.
The company got its start selling its eels to restaurants (Portland’s Miyake restaurants were an early customer). This year the company has expanded beyond restaurants and home chefs can now purchase American Unagi’s eels from Portland’s Harbor Fish, Biddeford’s SoPo Seafood, Rockland’s Jess’s Market and the Blue Hill Coop.
Smoked eel is a delicacy in Asian cuisine and is commonly seen in the United States as smoked eel or unagi at sushi restaurants. Much of the eel consumed throughout the United States actually starts out here in Maine, but is then shipped to Asia to be grown to market size, processed, and then flown back to the United States.
American Unagi’s “fisherman-to-farm-to-table” approach offers consumers a better alternative to imports, which makes its products popular among U.S. chefs, especially within the sushi industry.
“It makes much more sense to partner with Maine’s local elver fishery and to grow and process the eels here in Maine,” explained Rademaker. “Eels have a long track record of success in land-based aquaculture and our new facility utilizes these technologies. American Unagi is bringing proven land-based aquaculture to Maine and connecting it to a local fishery.”
Maine’s elver fishery
Adult eels mate and spawn in the open ocean in the Sargasso Sea, a large area of the western North Atlantic located east of the Bahamas and south of Bermuda. The eggs hatch after several days and drift in the ocean for several months before entering the Gulf Stream current to be carried north toward Maine. The young glass eels then leave the open ocean in the spring to enter estuaries and ascend rivers, which is when elver fishermen catch them. Eels may stay in growing areas for eight to 25 years before migrating back to sea to spawn.
The fishery is incredibly valuable. Maine’s elver fishermen caught 9,620 pounds of elvers in the state in 2019, according to the Maine Department of Marine Resources. At roughly $2,000 per pound, that equates to $20 million. The per-pound price dropped significantly (to $500) in 2020 due to the COVID-19 pandemic, but is back to $1,632 per pound in 2021, according to the department.
“It has been a long path from growing eels in my basement starting in 2014 to breaking ground on a commercial scale aquaculture facility in 2021,” said Rademaker. “I think I used all the business resources available in Maine. Top Gun, Maine Technology Institute, LaunchPad, SBA mentors, and Maine Venture Fund to name a few. The community has been immensely supportive at all stages of this journey. I honestly do not think I could have built this business anywhere else but Maine. I give a lot of credit to our robust startup ecosystem.”
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