Why Founders Fund Backed a Fish Robotics Startup

**Connie Loizos** (0:01)
Hi, I'm Connie Loizos.

**Alex Gove** (0:02)
And this is Alex Gove.

**Connie Loizos** (0:03)
And this is StrictlyVC Download.
Hi, and welcome back to StrictlyVC Download. In this episode, we travel down south to Southern California to learn about a company unlike any we've tracked before, and to learn what Founders Fund, among its biggest backers, saw in this outfit. Toward that end, we were joined by Saif Khawaja, co-founder and CEO of the startup called Shinkei, and Delian Asparouhov, the partner at Founders Fund who's closest to the company. What you'll hear is that Shinkei is building a vertically integrated seafood company, deploying robotics and computer vision on fishing vessels to process fish humanely at the moment they're caught, then taking ownership of that fish all the way through to grocery stores and top restaurants under its own brand, which is called Ceremony.
Again, this is an unusual bet, which is why it piqued our interest. And as you'll hear, Khawaja walks us through how Shinkei started with a single insight borrowed from high-end Japanese sushi chefs, that a calmer death produces a better tasting, longer lasting fish and how that idea grew into an ambitious bet to rebuild the entire American seafood supply chain. He and Asparouhov also get into some surprising territory. For example, the three of us discussed why the majority of fish caught in US waters is shipped overseas for processing before it ever reaches a US grocery shelf, and how labor and visa policy shapes the entire industry. Asparouhov also connects the dots on why El Segundo has become fertile ground for a company like this. In a nutshell, he makes the case that electrical mechanical engineering talent built up by SpaceX and the broader aerospace and defense ecosystem is now spilling into industries that have nothing to do with rockets. If you hear the audience in this one, it's because we hosted this conversation as part of one of our StrictlyVC Insider evenings, which was a lot of fun. In fact, if you were going to be in New York on September 10th, we hope you will join us at our next StrictlyVC Insider event happening at Ideal Glass Studios and featuring the CEO of DC United, serial entrepreneur Tristan Walker and numerous others. Thanks to our partners in the night, the team at Collaborative Fund, which raised its hand to help make it all happen. Thank you for listening. We hope you enjoy this one and we will see you back here next week.
Well, guys, why don't you, Saif, so we're really here primarily to talk about your company. So tell us a little bit about what you're building. So what I know about you is that you grew up in the Middle East, like you saw fish suffering while you were on these fishing trips, I guess, with your family and it was brought to the fore for you as an adult or maybe as a college student when you read an essay about these voiceless animals that are treated very inhumanely by people. Awesome.

**Saif Khawaja** (3:00)
Well, first of all, Connie, thank you very much for having us. My name is Saif. I'm one of the co-founders and the CEO of Shinkei.
In a very high level way, we are reshoring American seafood. We're building a vertically integrated fish harvester and a fish processor and deploying software robotics AI across the entire stack from fishing vessels to fish processing plants. Happy to take the conversation wherever you'd like, but that's kind of the overarching mission.

**Connie Loizos** (3:22)
So when did it go from, this is upsetting to I'm going to start a company? And then what was the initial idea for the company? Because it's actually grown quite ambitious.

**Saif Khawaja** (3:30)
So you mentioned that essay by that vegan activist. The essay was called If Fish Could Scream. So right now when you walk into most grocery stores, the fish that you buy, they're generally brought onto the deck of the boat. They're flopping around, releasing stress hormones, lactic acid, all this stuff that basically makes the meat shelf life shorter, damages quality, so on and so on. And so the essay is about how fish have vocal cords and can't express that pain during that time, and that kind of got me thinking. And I basically found this analog that the Japanese have to kosher slaughter for cows, where rather than letting the fish flop around, they pierce the fish in the brain immediately, they cut the gills, and the premise of doing that is that you stop the experience of stress, and in turn, the fish last longer, it tastes better, all this stuff. So we initially started with automating that process, and we had this product called Poseidon, but over time the companies now evolved, and like I mentioned, we're running a full vertically integrated model. We give the machines to fishermen for free, we pay them a premium to use the technology, and we actually take possession of the fish, and we sell that under a brand we call Ceremony, and we call that fish Ceremony Grade. And so the benefit of why we have the control for that is the fish last longer, they taste better, and that value accrues to the grocery store, to the chef rather than to the fishermen, we wanted to make that transaction happen there.