Dutch aquaculture investment fund Aqua-Spark is investing in the Swedish Algae Factory, a company using algae to convert recirculating aquaculture system (RAS) wastewater into silica extract used in the cosmetics and solar industries.

Swedish Algae Factory will use the capital to scale up the production of its branded silica extract, Algica.

"Swedish Algae Factory’s implementation of the circular economy impressed us from the start," said Aqua-Spark Managing Partner Mike Velings.

"By upcycling wastewater into high-value products for the solar and cosmetic industries, the brand is solving a major issue for land-based aquaculture and sustaining a separate, diversified business model."

The substance improves the efficiency of solar panels and can be used for moisturizing, cleansing and ultraviolet light protection in cosmetics.

Swedish Algae Factory provides farmers with algae to clean wastewater, absorb carbon dioxide, and create nutrient-rich organic biomass which can be used for fish feed or fertilizer.

Aqua-Spark is a primary investor in Swedish Algae Factory's latest round of funding.

Aqua-Spark is planning six to eight new investments this year on top of its existing portfolio in 2020.

The €130 million ($166 million) investment fund currently manages 19 small-to-medium enterprises (SMEs).

Though Aqua-Spark has a relatively narrow remit, being solely in the seafood space, it is looking to expand across the value chain in farming, technology, alternative proteins and seaweed, a sector Velings said "deserves more attention."

In October, Aqua-Spark invested in Fisher Piscicultura, a Brazil-based tilapia farmer, to help the company expand production capacity from 600 to 3,000 metric tons.

The investment group also plowed capital into Norwegian hatchery feed innovator Molofeed to help the company to solve aquaculture's biggest bottleneck; early-stage hatchery feed.

That same month, the firm backed Israeli water treatment company BioFishency to support its research and development phase and expansion in China.

Other companies in its portfolio include the data-driven tech company CageEye, the female-led Canadian aquaculture technology firm XpertSea, global aquaculture accelerator Hatch, and insect-based feed developer Protix, among others.