90% of "American" Fish Gets Processed in China. This Startup Is Changing That | StrictlyVC LA 2026

Company Overview and Mission

• The company, Shink, is working on reshoring American seafood by building a vertically integrated fish harvester and processor, and deploying software, robotics, and AI across the entire stack from fishing vessels to fish processing plants, with the goal of improving the quality and treatment of fish 10s.
• The idea for the company started with an essay called "If Fish Could Scream" by a vegan activist, which highlighted the inhumane treatment of fish and the negative impact of stress hormones on the quality of the meat, leading to the development of a product called Poseidon that automates the process of piercing the fish in the brain and cutting the gills to reduce stress and improve quality 2m6s.
• The company initially gave machines to fishermen for free and paid them a premium to use the technology, taking possession of the fish and selling it under the brand "Ceremony" as "Ceremony Grade" fish, which lasts longer and tastes better due to the reduced stress and improved handling 4m30s.
• The machines used by the company are inspired by the methods used by high-end Japanese chefs, who manually pierce the fish in the brain and cut the gills to improve the quality of the fish, and Shink's automated process has made it possible for American fish to be imported into Japanese fish markets for the first time in history 6m40s.
• The company's approach has the potential to improve the quality of fish and the treatment of fish, and has already achieved a significant milestone by becoming the first American company to export fish to Japan, which is known for its high standards for seafood quality 8m20s.

Technological Innovations in Fish Processing

• Ceremony fish is of high quality and is brought to the high-end Japanese fish market, where it can also be ordered in arowan, and the company is working on improving the collection of the fish to reduce stress and lactic acid buildup 10s.
• The company works with two of the main three industrial gear types, including long industrial versions of hook and line, smaller nets, and cages, which allow the fish to be caught and removed from the water alive, and then input into a machine for processing 2m6s.
• Some high-end fisheries use a process where the fish is taken out of the water and then put back into an aquarium on the boat that simulates the ocean, allowing the fish to return to a calm and natural state before being euthanized 4m42s.
• The company is building a foundation model using AI and machine vision to generate surgical accuracy at industrial speed in a maritime environment, and is literally removing fish heads and building data into their models to improve the processing of the fish 6m15s.
• The company is vertically integrated, taking full possession of the fish from the point it is pulled out of the water to when it is shipped to customers, and breaks down the fish in their plant in Tacoma, Washington, before distributing it to retailers or chefs 10m0s.

Vertical Integration and Industry Comparison

• The company's approach is different from the traditional fragmented industry in the United States, where fishermen, processors, and retailers are often separate entities, and instead is modeled after the poultry and beef industries, where companies often control the entire supply chain 12m30s.
• The opportunity to consolidate and introduce higher-quality products in the fish processing industry is available due to a tech advantage, allowing for vertical integration and the potential to charge a premium, with a margin that can be used to start this process 10s.

Investor Engagement and Entrepreneurial Passion

• The meeting between the two individuals occurred through a mutual friend, Sadigi from Nucleus, and they initially met 18 to 24 months before investing, with the entrepreneur's genuine passion for the industry being a key factor in the decision to invest 42s.
• When evaluating early-stage entrepreneurs, it is essential to determine if they are driven by a genuine belief in their work or if they are simply following a trend, with the entrepreneur in question being uniquely passionate about killing fish with robots and dealing with the associated challenges 2m6s.

Challenges in the Global Fish Industry

• The global fish industry faces significant problems, including illegal fishing, with over 90% of American fish being imported, and approximately half of these imports being of domestic origin, meaning they are caught in American waters but processed abroad 2m6s.
• A substantial portion of American fish is sent to countries like China for processing, with estimates suggesting that between 65% to over 90% of American fish are imported, and around half are of domestic origin, with a notable example being the shipment of a billion pounds of salmon to China and back to the US in 2021 2m6s.
• The fish industry relies heavily on low-cost labor, including indentured labor or slaves, to break down fish into fillets, with a significant percentage of labor being foreign-domiciled workers brought in on J1 visas, and this practice is similar to the agriculture industry, which uses a visa program called H2A for foreign labor 10s.

Labor and Compliance in the Fish Industry

• The United States has a large migrant population that comes in for seasonal labor in agriculture and fish processing, and the industry has shifted to using official H2A visas for compliance, with the Trump administration enforcing compliance in agriculture and fish processing 1m30s.

Founders Fund's Investment Strategy and Portfolio

• Founders Fund has invested in companies related to food production, such as Halter, which makes electric collars for grazing cattle, and The Hollow, a company founded by Dave Friedberg that optimizes crops using natural genes, particularly for potatoes and strawberries 2m6s.
• Founders Fund's investment strategy is to look for the best investments across various categories, rather than focusing on a particular industry like AI, and this approach led to their investment in a fish-related company, which they considered a good deal due to the lack of interest from other investors 3m30s.
• The company's investment in the fish industry is part of a broader trend of investing in areas that are not as popular with other investors, and they believe that this approach can lead to better returns and more innovative solutions 4m40s.

Product Innovation and Quality Control

• A new product called Europe has been launched, which is a sensor suite system that can scan fish and generate a quality score, with the goal of eventually projecting the shelf life of each individual fish, and this system is being used in a processing plant in Tacoma 10s.
• The current problem with the fishing industry is that when fish are bought from fishermen, they are just put into boxes without any information about when they were caught, which can lead to a significant variance in shelf life, and the company is trying to address this issue by building a model to generate ground truth and project the shelf life of the fish 42s.
• The company is working to reduce waste in the supply chain, with around 18% of product lost due to spoilage when moving fish from the port of landing to grocery stores or chefs, and they hope to prevent this by generating fish-by-fish logistics 2m6s.

Market and Customer Focus

• The end customers of the company are grocery stores and chefs, with around 50 Michelin stars across the restaurants they work with, and they are also working with local restaurants such as Arowan in LA 3m30s.
• The company is still working on what to do with fish byproducts, but currently, they are being used for fertilizer, and the company is focusing on telling the story of the value of their product to retailers and chefs, highlighting that their fish last longer and taste better 4m40s.
• The company is trying to create a new standard for fish, similar to grass-fed or USDA prime for beef, and they are branding their product as "ceremony grade fish", with the mission statement of democratizing access to artisanal food, and they are drawing inspiration from Japanese higher-end agricultural practices 6m10s.
• The company is also drawing inspiration from successful brands such as the Oishi strawberry, which is a Japanese strawberry brand that has become a massive business in the United States, and they hope to create a similar brand for American fish 8m20s.

Technology's Role in Improving the Supply Chain

• The promise of technology is that it should make things both better and cheaper, but currently, it's only making things cheaper, and there's an opportunity to improve the entire supply chain, making it a win for everyone involved, including fishermen, distributors, and retailers 10s.
• The market for fish processing is estimated to be around $150-200 billion, which is smaller than the poultry and beef markets, but with less competition, making it an attractive opportunity 2m6s.

Operational Challenges and Growth

• The hardest part of the business is running an entire supply chain from first principles and teaching people new things, which requires a lot of resources, and the company is currently investing in adjusting cycle times and figuring out how to work with large retailers and restaurant groups 4m42s.
• The company's robot, which processes fish guts on a boat in saltwater, was not working well initially, but after relocating to El Segundo and finding a new co-founder with the right engineering skills, the company was able to build a better product 6m15s.

Los Angeles as a Hub for Hard Tech Innovation

• The venture ecosystem in Los Angeles, which started with companies like SpaceX and Anduril, has created a pool of talented electromechanical engineers, avionics experts, and others, making it an attractive place to build companies, including those in the fishing industry 10m30s.
• The skills and expertise developed in the aerospace and defense industries in Los Angeles can be applied to a wide range of other areas, including the fishing industry, making the ecosystem exciting and promising for the future 12m45s.

Future of Venture Capital and Hard Tech

• The impact of a significant venture outcome is expected to accelerate a shift in investments towards complex electromechanical hardware and hard tech, with many top companies on the NASDAQ already involving such technologies 10s.
• A massive shift is occurring in the valley, with many investors who previously focused on software as a service (SAS) now trying to understand and invest in hardware and robotics, which is expected to continue and accelerate 42s.
• SpaceX has become a hub for engineering talent and entrepreneurs, and as people leave the company with liquidity, some will likely start their own ambitious companies, tackling significant problems and further accelerating investments in hard tech 1m30s.
• Despite the expected acceleration of investments in hard tech, data from Carta shows that the number of seed-stage startups is currently at its lowest point in 15 years, possibly due to higher barriers to entry for hardware companies compared to software companies 2m6s.
• The trend of decreasing seed-stage startups may reverse as more people become interested in starting hardware companies, and it will be interesting to see how the shift towards hard tech investments absorbs and affects the industry 2m50s.