Technical Due Diligence on TepBac for Aqua Spark

Context

Aqua Spark is a Venture Capital fund based in the Netherlands, specialising in aquaculture investments. They asked us to perform a technical due diligence exercise when they were considering an investment in Vietnamese company Tepbac. Tepbac provides a hardware and software IoT infrastructure for shrimp farms, monitoring shrimp health and water conditions and automating feeding. 

Our Process

We initiated a week-long exercise to assess the quality and robustness of the Tepbac’s hardware and software infrastructure, together with the fitness of its team, organisational structures and processes to be able to meet the expected challenges ahead. 

We recruited a Vietnamese interpreter, local to us, who was fluent in both languages and with technical and business expertise, to join us in person on calls with the Tepbac’s team members. This enabled in-depth interrogation of the founders to establish a full understanding of the state of their operations, and provided us with a nuanced view not just of their answers but with rounded insight into their apparent confidence or uncertainties in them. 

The aim of a technical diligence report is primarily to raise ‘red flags’ with respect to the company’s operations, capabilities and veracity of its claims. The report is also, sometimes, offered to the target company, helping to signpost for them any areas of weakness that need to be addressed and highlighting key strategic considerations as seen from the investor’s perspective. It is conducted through a review of the company’s documentation and systems, and through calls with the company’s leaders and key team. It covers a range of different concerns, often with adaptations to address specific concerns of the investors, but usually including the following areas, amongst others:

• reviewing the organisational structure and leadership;
• providing recommendations with respect to structure, roles, required skills, and unfilled needs;
• looking at whether their development methodologies (such as Agile) are well-considered and appropriate to their stage;
• assessing the quality and organisation of their design processes, code, recording keeping and test procedures;
• evaluating their planning processes, both short- and long-term, including product development roadmaps, and looking at whether they are realistic, useful, and up-to-date;
• discussing the role of wider strategy in formulating their technical strategy, and looking at the extent of adaptability to unexpected events;
• assessing scalability and identifying potential bottlenecks to future growth.

As is commonly the case, the outcome of this exercise was delivered in three stages. First via an interim report, which outlines our initial impressions and provides an opportunity for the client to raise their own concerns. This was followed, at the completion of the main bulk of the exercise, with a video call with Aqua Spark’s investment panel, at which our fuller findings are presented, providing an opportunity for them to probe further into areas that capture their attention, and providing a little more nuance than is usually possible in a written report. This was followed with the full report, covering full findings and addressing the additional concerns raised in the call. 

The Outcome

Although specific details of this exercise remain confidential, Aqua Spark did proceed with this investment, with our review forming an input to their wider decision-making processes and checks. Tepbac have subsequently won awards internationally for their technology including, most recently, winning the Judges’ award in the THRIVE Hawaii Agrifood summit.