Aqua-Spark is defending its investment in transaction-driven start-up CageEye.
They’ve been under the spotlight lately. CageEye/Bluegrove has used alleged “strategic partnerships” with Microsoft and BASF and a funding mandate with DNB to pique investor interest and raise capital. However, it has since been shown that this information was not correct.
Aqua-Spark has put in more capital than anyone else in CageEye/Bluegrove, but their view of the Oslo-company does not seem to have changed in light of recent events.
“We work closely with the company and stand behind their mission, their strategy, and the progress they’ve made,” said Amy Novogratz.
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Sustainable and accessible
She leads the USD 180 million fund Aqua-Spark, based in Utrecht, Netherlands, with her husband Mike Velings. The investment fund is “with a mission to transform the global aquaculture industry into one that is healthier, more sustainable, and more accessible”.
Though neither accesibility nor transparency is a part of that mission. In recent days, CageEye’s administration, chairman, and auditor have not been particularly eager to share information.
And whether the extraordinary valuation of the company is sustainable is now being put to the test.
According to a shareholder letter from CageEye/Bluegrove CEO Bendik Søvegjarto, dated August 26, Aqua-Spark demanded and the board approved the start-up company’s inflated valuation, in the wake of the alleged agreement with Microsoft:
“With the latest developments with terms from MSFT (Microsoft’s stock ticker – ed. note) Aqua-Spark (VC investor in Series A and lead lender in both rounds of the convertible loan; now with EUR 3.5 million invested in the loan) has demanded, and our board approved, that the convertible loan gets a cap on enterprise value at at EUR 120 million valuation,” wrote Søvegjarto.
EUR 120 million valuation. But the catch is that Microsoft has rejected the existence of a strategic agreement.
“The relationship with CageEye/Bluegrove is appreciated, but it is wrong to imply any additional status or elevated partner status,” Karen Hammeren, Microsoft Norway’s communications director, told SalmonBusiness.
The fact that they have claimed to have strategic partnerships with Microsoft and BASF, that was not true, and were falsely using DNB as to a tool to raise money. Is that ok? Do you see any problems with this communication?
“We believe the company’s work and commitment speak for itself,” Novogratz said.
So presenting false financial information is not a problem and in line with how you operate your business?
“With respect, you are making serious allegations here. We know everything that we need to know about their relationships with third parties, and as investors, we are confident that no false statements have been made by the company,” replied Novogratz.
No, I ask a direct question here. DNB Markets has said CageEye’s alleged mandate is “just nonsense.” That such an agreement exists, CageEye itself has also in writing denied to SalmonBusiness. Microsoft has confirmed that it does not have a strategic partnership with CageEye. And BASF has called an alleged strategic partnership “market rumours”. After putting money into CageEye, would you comment on the EUR 120 million valuation? Is this a fair price and will it pay off for Aqua-Spark?
“I don’t think CageEye has published the valuation. We emphasise never sharing valuation or financial information about the companies in our portfolio,” she pointed out.
Is that relevant? This valuation is publicly known now – known to tens of thousands of readers through multiple media.
(Amy Novogratz did not answer the last question. The interview has been done by email, over several days, despite SalmonBusiness’ request for a telephone interview).