Founders Fund’s outside bet is on humanely killed fish

Earlier this week, at TechCrunch’s latest StrictlyVC event in Los Angeles, Shinkei Systems founder Saif Khawaja and Founders Fund partner Delian Asparouhov sat down for a conversation that kept coming back to a question not usually asked at a venture event: How do you know if a fish is stressed?

It’s a fair question for Khawaja to ask, as his company, Chinky, has built its entire business around the answer. Shinkei makes a refrigerator-sized robot called Poseidon that fishermen install on their boats. The machine scans each fish with computer vision, determines its species, and determines the location of the brain. Then it pierces the brain and cuts the gills, so the fish dies before it can be crushed or suffocated.

It may not seem very painful, but it is much better than the alternative, which is slow death over a few minutes to an hour that floods the fish with stress hormones and lactic acid, dulling flavor and shortening shelf life. The whole thing is an industrial-scale, automated version of the ike jimi technique, a centuries-old Japanese technique traditionally performed on the dock by trained fishermen at the moment of the catch. By killing the fish immediately and draining its blood, Ike Jimmy delays decomposition long enough for the meat to be safe for several days, sometimes longer, before serving. This aging period is what gives top-grade sashimi its concentrated, umami-heavy flavor, as enzymes slowly break down the muscle.

Khawaja’s origin story is somewhat unusual for a hardware show. He grew up taking fishing trips with his family in the Middle East, and the idea for Schinke didn’t occur to him until after college, when he read an article by an animal rights philosopher called “If Fish Could Scream.” Its premise was that fish lack vocal cords, so the suffering most face on their way to your plate is essentially invisible.

But Shinki’s ambitions expanded beyond the killing machine. The company now describes itself as an integrated fish harvesting and processing company, deploying robotics and artificial intelligence across the chain from boat to plate. Shinkei gives the Poseidon machines to fishermen for free, and then pays those fishermen a premium price for the fish that come out of them, much higher than what a catch would fetch at a standard pier auction. In return, Shinki takes possession of the fish entirely rather than allowing fishermen to sell it on the open market. The catch is then shipped to a 16,000-square-foot plant that Schinke purchased in Tacoma, Washington, where it is gutted and sold under the company’s consumer brand, Sirmoni, and marketed as “festive-grade” fish.

The most obvious proof point yet is the menu at Erewhon, the Los Angeles grocery chain beloved by influencers. Erewhon sells Shinkei as Seremoni Grade Miso Black Cod, which is served hot in deli bars, and its marketing relies heavily on a “sustainably caught and humanely harvested” framework. The arrangement is still experimental, and is currently being implemented out of Erewhon’s Manhattan Beach location, with a wider rollout to other stores contingent on how well it sells. Khawaja says the company is already supplying fish to 50-Michelin-starred restaurants, and he claims something that has never been done before: Japan imports American-caught fish into its own fish markets, which has historically treated American seafood as lower quality than the domestic product.

Whether buyers will pay a premium for “humanely killed” fish, as many now do for humanely raised beef and poultry, is still an open question, and even Al-Khawaja says it is secondary when explaining the company. The real selling point is not so much the animal welfare story as the practical story about quality, he told the El Segundo audience. He said that the shelf life of the catch, which may normally range from 5 to 7 days, could extend to 12 or 14 days, and the company cooked the fish three weeks after it was taken out of the water without any problem. Shinkei’s latest product, an in-plant sensing system, attempts to measure this by scanning fish and predicting the individual lifespan of each one. This is important in an industry where, according to Khawaja’s estimates, approximately 18% of product is lost due to spoilage between the dock and the warehouse, before retail loss is factored in.

This spoilage problem is intertwined with details of the American seafood supply chain that surprise most people who haven’t worked in it. A large share of the fish caught in American waters is frozen by American boats and shipped overseas, often to China, for labor-intensive work such as gutting, gutting, peeling and filleting, and then shipped back to be sold here. Industry estimates of the amount of US seafood imports are as high as 90%, although by some estimates nearly half of that actually originates in domestic waters before making the round trip abroad. Reports have linked parts of China’s seafood processing sector to forced labor, including Uighur workers in Shandong province and North Korean workers in Liaoning, making the system a target of US trade and labor scrutiny in recent years.

There has been pressure within the industry to “backstop” some of this processing, driven in part by tariffs and pandemic-era disruptions that have made round-trip flights to China less attractive. The bet Schinke — and the Founders Fund — is making is that reshoring the entire chain, hunting, killing, processing and distribution, all under one roof in Tacoma, can be done profitably enough to outperform it.

For the Founders Fund, the bet fits the pattern, which is to back founders who are often outside the trendy categories. Asparuhov, speaking at a mile a minute and without reservation, made it plain to the audience: No one else on Earth wants to spend their lives on fish-killing robots, and given the smell of Schinki’s office, no wonder. (We all laughed at that remark, though it downplays the field a bit. In addition to Shinki, a Japanese company called Nishimo sells a device that shocks fish to help humans perform “jimmy” hand movements, and several Norwegian startups are building robotic systems to slaughter and process fish more humanely. Shinki’s clear advantage, at the moment, is that it is the only company using the fully automated version of this technology on a large scale on American boats.)

In fact, Asparuhov said the company deliberately keeps its exposure to crowded categories like general AI applications relatively low. By his calculations, AI and defense together represent roughly 15% to 20% of the fund’s deployed capital, far less than what he estimates is typical elsewhere in the venture. Shinkei sits alongside Halter, a New Zealand-founded company that makes solar-powered, GPS-equipped cattle collars that allow ranchers to herd livestock remotely, and Ohalo Genetics, a crop genetics company founded by All-In podcast co-host David Friedberg, as proof that the company’s appetite for food and agriculture is not a one-off.

Of course, the fund’s latest headline-grabbing win has nothing to do with fish. Its early, bold bets on Elon Musk’s SpaceX — a relationship dating back to the shared history between Peter Thiel and Musk at PayPal — are said to have generated tens of billions of dollars for the company (it’s one of the largest venture results ever recorded). Asparuhov argued that the win would accelerate the broader shift in enterprise toward hardware and businesses in the physical world, noting that most of the top companies on the Nasdaq today already use complex electromechanical systems rather than pure software. He predicted that more SpaceX graduates, who are liquid and shaped by working alongside Musk, will go on to create their own ambitious companies in the physical world.

Whether or not Shinkei will become one of the company’s next big wins will take some time to find out. He bitten a lot. The company is a robotics manufacturer, a seafood manufacturer, and a consumer brand, all operating simultaneously, each with its own difficult challenges. Fishermen are used to working in a certain way. Distributors are built on decades-old habits. Chefs and grocery buyers have yet to be convinced that a story about humanely slaughtering fish is worth paying more for. This doesn’t mean anything about the hardware, which has to withstand saltwater, fish guts, and life on a commercial boat, or that the product you’re selling is perishable, so there’s not much room for the kind of flop that a straightforward software company can ignore.

However, talking to the two together in El Segundo was enough to make the audience understand why Founders Fund found the bet compelling. The company doesn’t believe it has found a founder building something new in a surprisingly dysfunctional industry; She believes it’s the kind of company no one else in the United States wants to build.

You can watch our full discussion below.