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The Spoon

Daily news and analysis about the food tech revolution

food startups

Hungry for Funding? New Avenues for Food Startup Financing are Opening Up

Ask many people how to find funding for emerging food projects, and lots of them will point to crowdsourcing sites. After all, sites such as Kickstarter have driven concepts ranging from PicoBrew to the Anova Precision Cooker to levels of funding that would put a smile on any startup founder’s face. Indeed, when it comes to gadgets and devices in the food arena, the widely known crowdsourcing sites can pay off, but other kinds of concepts are finding funding through alternative routes and alternative crowdsourcers.

Where can you turn if Kickstarter or GoFundMe don’t seem right for your project? If you have a food or beverage startup concept, consider PieShell. It’s based in New York, and was founded by entrepreneur Cheryl Clements. Check out some of the concepts that PieShell is funding here.

Part of PieShell’s concept is that crowdfunding has benefits that go beyond just money. “Crowdfunding ultimately brings you closer to your customers — something that’s crucial for startup success,” notes PieSheller Caroline Halter. “Branching out beyond friends and family helps you learn what your customers like about your product, as well as what they don’t like. For instance, one of our first PieShellers, Edamam, crowdfunded to build a nutrition app. The crowdfunding experience helped them realize that their real potential was in B2B (business-to-business), rather than consumer markets.”

According to Halter, another benefit to crowdfunding is that it can give you an instant hook for a pitch to the press. “Once you get a little bit of press, it’s much easier to get more,” she said.

 Credibles is another avenue to look into for funding. It was started in San Francisco in 2014 by founder Arno Hesse. The twist that Credibles provides is a way for customers to financially support their favorite food businesses. The basic concept is that customers are investors. Customers can prepay a business by starting a tab with the business, and then they draw on the tab whenever they visit.

Credibles offers food and beverage businesses financial flexibility up front. Case in point: Driver’s Market is a small grocery store that focuses on transparent, non-GMO sourcing direct from as many local producers as possible. Through Credibles, Driver’s Market has already raised over $100,000 from its customers, with the first $10,000 arriving in 10 days. You can find out how to get your business or concept funded with Credibles here.

The angel investors who provide funding for technology-focused startups have their counterparts in the food and beverage arena. Food Angels is an organization that strictly invests in early stage food and food-tech startups. The group consists of accredited angel investors who screen companies each month and select a few to consider for funding. Food Angels invests in the form of equity, royalties and more.

There are also community organizations for food startups seeking funding. The Angel Food Network is an organization of emerging food and beverage companies seeking funding. Membership is by invitation and you can apply here.  Some types of food and food tech concepts may also qualify for the IKEA Bootcamp accelerator program, which will reward startups trying to solve the world’s problems. Food tech concepts have the potential to qualify, and you can find out more here.

Finally, it’s worth noting that the world of food funding has its own dedicated conferences. Future Food-Tech is one that is typically held in North America and Europe, and the Food Investing Conference is another one to look into.

Getting a project funded can call for some creativity, but there are more options available to startups than ever before. Entrepreneurs who think outside the box will have the strongest chances to find funding.

Make sure to check out the Smart Kitchen Summit, the only event about the future of food, cooking and the kitchen. Also, make sure to subscribe to get The Spoon in your inbox. 

Entrepreneur Hopes To Transform Shanghai Into Food Startup Hub

China’s middle class is changing and with that change comes emerging differences in the way their population consumes food. This week Fast Company introduced the new food tech accelerator, Bits x Bites – the first of its kind in China – and how it’s looking to help shape the nation’s food and agricultural systems. According to Matilda Ho, founder of Bits x Bites, the accelerator’s mission is to “shape the future of good food by investing in early stage startups that use technology to solve food system challenges in China.”

Ho founded the successful Chinese food startup Yimishiji, an online farmer’s market that delivers chemical-free produce by electric bike to Shanghai consumers. Her work with Yimishiji made Ho realize she wanted to expand on the vision and help build a community of other food tech startups that were working to shape food and agricultural sustainability across the country. The Bits x Bites accelerator was born and the 120-day program, based in Shanghai, gives startups capital, coaching and a like-minded community to network and help them take their idea to the next level.

While all of the startups under Bits x Bites are offering innovative solutions that are also common in other parts of the world, they also appeal to the nuances of Chinese culture. In Chinese culture, salad is not a common meal as it is in the West. Startup Frugee markets their cold-pressed, high-pressure pasteurized juice from fruits and vegetables as a nutrient-rich alternative to eating salads. Another participant startup, Alesca Life, addresses the issue of limited arable land in China by producing hydroponic farms that come in shipping containers, coupled with software to run them. Their first focus is on hotels that want to grow their own produce for in-house restaurants.

A third, currently unnamed startup addresses the issue of creating a sustainable animal agriculture system by developing noodles and other foods that are made from silkworm flour similar to the way other global startups are producing cricket flour. Since the worms are often discarded after using their cocoons for developing silk, using the by-product is a cost-effective alternative to wheat or other grain flours.

In an interview with That’s Magazine, Ho commented on her vision and drive to pursue an accelerator in Shanghai and how it might transform. the Chinese food system,

There are more than 4,000 startups opening shop in China every day. If we can harness some of this entrepreneurial energy to solve food system challenges, the impact can be astonishing. With our experience building the online farmers’ market Yimishiji, we hope to help more startups accelerate their growth and build a sustainable business.

Ho sees food tech startups growing rapidly in China, but recognizes that a lot of work needs to be done both in China and across the global food industry – starting with participation in accelerators like Bits x Bites. She is already seeing an influx of major Chinese food companies visiting the startup each week, looking for ways to get involved with food incubators or their own or to help make strides in the space. As a global leader, increased investments in tech for China’s food and agricultural system is important for sustainability inside and outside of the country.