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The Spoon

Daily news and analysis about the food tech revolution

Funding

Imperfect Foods Raises $72M to Expand Delivery of Ugly Produce and Pantry Goods

Imperfect Foods, the company that delivers surplus and “ugly” food directly to consumers, announced today that it had closed a $72 million Series C funding round. The round was led by Insight Partners with support from existing investors, including Norwest Venture Partners. This bumps the total amount raised by Imperfect up to $119.1 million.

You may have seen Imperfect Foods (formerly known as Imperfect Produce) boxes sitting on stoops around your neighborhood. Since 2015, the company has been delivering boxes of surplus and cosmetically imperfect produce — that is, fruits and vegetables that would normally go to waste — to consumers in curated boxes. The produce is discounted up to 30 percent compared to grocery store prices.

In an intriguing pivot, last year the company diversified into other grocery categories, like dairy, meat, and pantry items. Some of these were still “imperfect” products, like coffee beans that were too small or misshapen almonds, but others were not. Last year the company also launched a pilot program to pick up their delivery boxes for reuse.

With its new funds, Imperfect will continue to bring its grocery delivery to more areas across the country and add on to its fulfillment centers.

I received Imperfect boxes for a little over a year but discontinued them since, as a single person, I couldn’t use enough of my box to justify the cost. But ever since the pandemic has had me sheltering in place and dreading trips to the grocery store, I’ve missed my weekly boxes of produce and staples.

In fact, COVID-19 actually presents a valuable opportunity for Imperfect Foods. Surveys show that up to 60 percent of consumers are “fearful” of shopping inside grocery stores, while sales of online groceries are skyrocketing. Imperfect can provide the online grocery experience with a side of good conscience since you’re also cutting down on food waste.

Imperfect isn’t the only company to deliver ugly fruits and vegetables to consumers. Misfits Market also ships boxes of cosmetically flawed produce to consumers. Theirs is all organic, but the key difference is that you can’t choose what’s in your box, while Imperfect offers customization options.

In a time when consumers are relying on convenience and valuing their health perhaps more than ever, it’s a prime time for delivery services like Imperfect. Clearly investors feel the same way.

Barcelona’s Cubiq Foods Raises €5M to Produce Better-for-You Cultured Fat

Cubiq Foods, a Barcelona-based startup making cultured fats for food products, announced today that it had raised €5 million ($5.4 million) from Blue Horizon Ventures and Moira Capital Partners (h/t Tech.eu). This bumps the company’s total amount of funding up to €17 million ($18.4 million).

Founded in 2018, Cubiq Foods cultivates fats and fat/water emulsions for use in industrial food products. The process is very similar to what companies are doing with cultured meat, only they’re doing it with fat. Specifically, Cubiq Foods makes oils that are rich in omega-3s, which have a laundry list of health benefits.

With its new funding, Cubiq Foods will scale up the production of its fats to industrial levels. It aims to make its cell-based fats commercially available to companies around the world by the end of 2020.

In addition to its omega-3 fat, Cubiq also converts liquid oils — like olive oil — into solids, which are intended as replacements for vegan fats like coconut oil. This could have real benefits in plant-based meat, specifically. Many options on the market right now, like Beyond Meat and Impossible Foods, use coconut oil to give their ground “beef” a juicy richness. Coconut oil is high in saturated fat, which can raise cholesterol levels. Adding Cubiq Foods’ new fats to their products could help plant-based meat companies make their foods more healthy and better fight critiques around health they’ve struggled against over the past year.

During the COVID-19 pandemic, plant-based meat has been getting more attention than ever — and attracting a boatload of funding, to boot. In this climate, I doubt that Cubiq Foods will have difficulty finding alternative protein companies to partner up with.

Ecoinno Raises $6M for Compostable Food Packaging Made of Sugar Cane and Bamboo

Ecoinno, a Hong Kong-based company making sustainable packaging from plant fibers, has raised $6 million in Series A1 funding from Alibaba Hong Kong Entrepreneurs and Alibaba Taiwan Entrepreneurs Fund (h/t South China Morning Post). This brings the startup’s total funding to $8.8 million.

Founded in 2015, Ecoinno uses a patented technology to make a sustainable packaging material out of pulp from bamboo and sugar cane. Called green composite material (GCM), the product is compostable and will decompose in 75 days.

Thus far, GCM has been trialed chiefly in CPG applications like coffee capsules, as well as single-use takeaway food containers. South China Morning Post reports that it’s first customer will be an undisclosed Hong Kong airline… once the coronavirus pandemic passes and flights to and from Hong Kong resume in full. The airline will use Ecoinno’s biodegradable food and drink containers to serve passengers.

Ecoinno will use its new funding to scale up production of GCM and expand R&D for more applications of its biodegradable packaging. It’s also building a fully automated factory in Tai Po with robotic assembly lines.

Since most of us are relying on takeaway and delivery to get our food these days, packaging is definitely top of mind. Even before COVID, fast food chains like Taco Bell and Starbucks had outlined ambitious plans to cut packaging waste and switch to recyclable or compostable options.

But not all compostable packaging is actually, well, compostable. Some contain so-called “forever” chemicals which are harmful to humans and never break down. Sweetgreen and Chipotle have both taken big steps in 2020 to transition to truly compostable containers, though it’s tricky to find biodegradable food packaging that’s strong enough to hold food, especially liquid, without breaking. Ecoinno’s GCM is made of 100 percent plant fibers, so no pesky forever chemicals.

Of course, the GCM hasn’t been put to the test yet. But considering we’ll probably see more to-go orders for a long time yet, even after restaurants reopen dining rooms, now is certainly an opportune time to invest in green packaging innovation.

Ireland Grocery Delivery Startup Buymie Raises €2.2M

Buymie, a grocery delivery startup based in Dublin, Ireland, announced this week that it has raised €2.2 million (~$2.39M USD) and extended its partnership with German supermarket chain Lidl for another two years. The Irish Times first reported the news on Tuesday. ACT Venture Capital led the round, with participation from Sure Valley Ventures and Eamonn Quinn Buymie’s chairman. This brings the total amount raised by Buymie to €4.8 million (~$5.21M USD).

Like Instacart here in the U.S., Buymie’s workers go into Tesco and Lidl stores to shop for items then deliver them to customers’ homes in as little as an hour. Buymie is available to more than 490,000 households in the greater Dublin area, and the company will use its new funds to build out its service and expand into a second city.

Demand for grocery delivery in Ireland has skyrocketed during the coronavirus pandemic. Buymie told the Irish Times that the number of monthly active customers is growing up 39 percent month over month, and that there’s been a 300 percent increase in the number of downloads for its app.

However, all this rapid growth has a downside as customers are now facing weeklong delays before delivery windows open up. Hence the need for Buymie’s fresh capital raise to scale accordingly.

The need to scale quickly is a situation U.S. grocers are all too familiar with. Shelter in place orders have resulted in a surge in online grocery shopping, forcing even the biggest grocery companies to scramble in an effort to keep up. Amazon has put new Fresh and Whole Foods customers on a waitlist before they can get deliveries. ShopRite has put customers in a virtual waiting room before they can even shop. And delivery service Instacart is swelling its ranks of Shopper gig workers to 750,000 to keep up with demand.

Here in the U.S., some states are starting to relax shelter in place orders, which raises the question of whether or not the desire for online grocery shopping will remain. A recent survey showed that 60 percent of American shoppers are “fearful” of actually going into the grocery store. So while grocery e-commerce may not be full throttle, it probably won’t disappear completely once people are allowed to leave their homes.

I’m not sure what the situation is like in Ireland, but everyone eats, and it looks like Buymie’s funding is coming at the right time.

Plantible Raises $4.6M to Accelerate Production of Protein Made from Aquatic Plants

Plantible Foods, a San Marco, California-based startup making alternative protein from aquatic plants, has raised a $4.6 million seed round. The round was co-led by Lerer Hippeau and Vectr Ventures, with participation from FTW Ventures and eighteen94 Capital, the corporate venture arm of Kellogg’s.

Founded in 2018, Plantible processes lemna, also known as duckweed, to create a high-protein powder called Rubi Protein which it sells to B2B partners. As we wrote when we profiled Plantible earlier this year:

Plantible’s scientists developed a proprietary process to extract the grassy flavor from lemna, leaving a protein that’s on par with pea or soy nutrition-wise, but is completely colorless, odorless, and flavorless. The perfect blank canvas for a variety of animal alternative products. 

Speaking to me on the phone this week, Plantible’s co-founder Tony Martens said the company has now raised a total of $5.8 million in funding. He also told me he and the Plantible team had decamped to live out of trailers on their two-acre lemna farm as soon as California enacted its shelter-in-place measures. Despite the circumstances, the small team is continuing to produce the Rubi Protein and push forward with R&D.

The company plans to use the fresh funding to scale up production. Right now Plantible is only able to utilise about 4 percent of the lemna grown on the farm, which they process in a lab on wheels (“like something out of a Breaking Bad episode,” Martens said). The goal is to be able to invest in a larger processing facility so that they can start turning all of the lemna from the aquatic farm into Rubi Protein.

Of course, our conversation quickly turned to the coronavirus pandemic. Martens said that for now, they’re still planning to plow forward with commercialization. For the past few months Plantible has been testing its Rubi Protein Powder with several corporate partners and they still hope to have a product featuring Rubi Protein out in the market by late 2020 or early 2021.

But Plantible isn’t immune to the effects of COVID-19. “Lots of plant-based foods are priced at a premium,” Martens told me. “Smaller brands might have a tough time surviving the recession that could result from the pandemic.”

Indeed, Plantible will be more costly than some other plant proteins, at least initially. But Martens is confident that they’ll quickly be able to undercut the price of egg whites — one of the ingredients that Rubi Protein can replace — and will eventually be cheaper than pea protein.

CPG companies are looking for ways to cash in on the plant-based foods craze. With this new funding, it looks like Plantible will have a chance to prove its worth in the canon of alt-protein ingredients — coronavirus or no.

Eat Beyond Global’s CEO on Why Now is Prime Time to Invest in Food Tech

With so much instability in the world right now, it may seem like a tricky time to be raising money for an investment fund. Especially in a burgeoning space like food tech.

But according to Patrick Morris, CEO of Eat Beyond Global, COVID-19 actually presents a ripe opportunity for investment in food innovation. Eat Beyond Global is a Canadian fund focused on food tech, particularly in the alternative protein realm. Morris told me that they plan to make 10-20 plant-based investments ranging in amount from $1 million to $10 million CAD over the next four years with a minimum ownership goal of 5 percent.

Right now Eat Beyond is raising the second half of its initial fund, which will be between $5 million and $7 million CAD. By the end of the year, Morris hopes to raise as much as $30 million CAD.

The fund has whittled down their initial potential investment companies to 5 options and will deploy capital over the next several months. They’re targeting early-stage companies, ones that are “just starting to make an impact,” according to Morris. He hopes the fund will be public on the Canadian stock exchange by Q2 of this year.

Morris wouldn’t divulge the names of the five companies they’re considering, but said that four were focused on plant-based foods (eggs, milk, bread, and ice cream), with one concentrating on cellular agriculture. True to its name, Eat Beyond Global isn’t limiting its investments to Canada; Morris named the U.S., Japan, and England as other areas it’s exploring.

Despite the looming economic uncertainty brought on by COVID-19, alternative protein is one area that has actually seen a lot of investment recently. Over the past month alone, plant-based chicken startup Rebellyous raised $6 million, Singaporean alt-meat company Growthwell Group nabbed $8 million, and Israeli chickpea protein producer Innovopro raised $25 million.

Venture funds are also taking notice. In the U.S. Big Idea Ventures (BIV), which raised $50 million for its New Protein Fund last year, is in the midst of raising a whopping $250 million fund for investment in new technologies throughout the food system.

Clearly, the global pandemic isn’t putting a damper on Tom Mastrobuoni, a Venture Partner at BIV, who told me last week that the coronavirus could actually shed some light on the shortcomings in our food system — and the need for sustainable, tech-driven solutions.

Morris agrees. “The fact that we could close the first half of our financing during COVID-19 — when all hell is breaking loose — shows the strength of the category.”

Cheetah Raises $36M for its Wholesaler-to-Consumer Grocery Delivery and Pickup

Cheetah announced today that it has raised a $36 million Series B round of funding for its marketplace that allows consumers and small businesses to shop for groceries and other supplies direct from wholesale suppliers. The round was led by Eclipse Ventures, with participation from ICONIQ Capital, Hanaco Ventures, and Floodgate Fund. This brings the total amount of funding raised by Cheetah to $66 million.

Consumers looking for an alternate place to buy groceries and other supplies can download the Cheetah app, shop in its marketplace, and then go to a designated pickup point where orders are delivered into the back of their car, no contact necessary. Right now, Cheetah is only available in certain parts of the San Francisco Bay Area.

Connecting consumers with restaurant suppliers has become quite the trend during this COVID-19 pandemic. With supermarkets running low on items and the difficulties shoppers have finding a convenient delivery times, entrepreneurial startups are activating other parts of the food supply chain like wholesalers.

Cheetah is the latest such company that has shifted from strictly B2B for restaurants to D2C. Pepper, DineMarket and Choco all offer similar services. Of those Pepper and DineMarket are only available in the New York area, and earlier this month Choco raised $30.2 million (it has raised $71.5 million to date).

As I wrote yesterday, I’m curious to see if this consumer shopping from wholesalers becomes the new normal once the coronavirus outbreak recedes. Both Cheetah and Choco (which is fun to say out loud), have raised big money and are going to need to scale their businesses to get a return for investors.

Even though restaurants in some parts of the country are re-opening, they are doing so at a greatly reduced seating capacity (50 – 25 percent). Even then, questions remain as to how much people will want to even go into restaurants. Sure, there will still be restaurant delivery, but that can get expensive real quick, and a nation still recovering from a depressed economy may choose to make more economical meals at home. Which means more shopping in bulk, which means buying from wholesale suppliers might make more sense.

Singaporean Alternative Meat Co. Growthwell Group Raises $8M, Will Develop Chickpea Protein Products

The Growthwell Group, a plant-based protein company based in Singapore, announced today that it had raised $8 million (h/t Deal Street Asia). The investment was led by Singaporean sovereign fund Temasek with participation from DSG Consumer Partners, Insignia Ventures, Genesis Ventures, and others. Growthwell also announced it had made its own investment in ChickP, an Israel-based startup developing chickpea protein.

Founded in 1989, The Growthwell Group owns a portfolio of alternative protein companies aimed at Southeast Asian consumers, including OKK (plant-based meat), Su Xian Zi (vegan mutton), and gomama (ready to eat dishes made from plants). As of today, that lineup will also include ChickP, maker of super high protein chickpea powder for use in meat and dairy alternatives. It sells products to roughly 1500 retailers and 3000 foodservice establishments.

Growthwell plans to use ChickP’s proprietary protein isolate to develop new products for the Asia-Pacific market. According to AgFunder, the new chickpea-powered foods will include plant-based shrimp and squid meat, as well as a vegan crab burger. Next up, it’ll develop chickpea milk and ice cream.

In addition to bringing ChickP’s protein to Asia, Growthwell will also use its new funding to open a new R&D center in Singapore with fully automated production lines. The facility is slated to open in 2021. The company is also working to bring its suite of plant-based foods to new markets, specifically China and Australia.

For its part, Temasek is all over the alternative protein space. This year alone they’ve already made investments in cultured meat startup Memphis Meats, Impossible Foods, and Califia Farms. In 2019 they put some major capital into Perfect Day’s flora-based dairy technology.

Asia is a burgeoning market for alternative protein, especially as the African Swine Fever decimated pork production and COVID-19 has thrown a wrench into meat manufacturing. Singapore in particular, with its goal to produce 30 percent of its food within its borders by 2030, has invested quite heavily in the plant-based food space.

At the same time, U.S. players are making their own play for the alternative protein market in Asia. Beyond Meat began selling at Starbucks in China last week and Cargill has a limited-time launch of plant-based chicken at KFC China. Impossible Foods isn’t far behind.

These three are peddling vegan beef, chicken, and pork, so Growthwell is focusing on less crowded markets like seafood and dairy. We’ll have to see if their new funding can help the company push through the challenges of COVID-19 and become a plant-based powerhouse on the other wise.

Israel: InnovoPro Snags $15M to Boost Chickpea Protein Production

Chickpea protein is bulking up. Today Israel-based company InnovoPro announced it had raised a $15 million funding round led by Jerusalem Venture Partners with participation from CPT Capital. This brings the total amount raised by the company to just under $20 million.

InnovoPro makes a chickpea-based protein powder for B2B use. Called CP-Pro 70, the powder is 70 percent chickpea protein (chickpeas naturally have about 20 percent protein). It’s also non-GMO and has the added appeal of being free from common allergies like soy, dairy and gluten. The company claims that CP-Pro 70 has a neutral taste and is versatile enough to be used to make a variety of hot and cold vegan products, from ice cream to burgers to mayonnaise.

So far, products using CP-Pro 70 have launched in Israel, Europe, and the U.S. Innovopro is also developing an organic version of CP-Pro 70 as well as a Chickpea Starch product.

InnovoPro isn’t the only chickpea protein peddler on the block. Last year ChickP, also based in Israel, unveiled a 90 percent chickpea-based protein intended to go into dairy alternatives like milk and yogurt. In the U.S., Nutriati and ProEarth are both making chickpea powder for a variety of food and bev use cases.

It’s no wonder that chickpeas are having a bit of a moment in the alt-protein space. Most raw ingredients for plant-based meat and dairy — soy, wheat, and nuts — are major allergens. Chickpeas and pea protein, however, are not. They’re also cheap, plentiful, and a familiar product for consumers who might shy away from edgier ingredients, like air protein or grasshoppers.

InnovoPro will use its new funds to expand its B2B partners. We’ll see if it can establish a firm foothold in the alternative protein market before the other chickpea companies edge them out.

Hargol FoodTech Raises $3M to Launch First Grasshopper Protein Product

Hargol FoodTech, a company that produces commercial grasshopper protein, announced today that it had raised $3 million from existing shareholders Sirius Venture Capital and SLF Investment Partners. This brings the company’s total funding to $5 million.

With its new funding Hargol plans to expand its production capacity to launch its first insect protein product line, which will be called Biblical Protein.

Based in Israel, Hargol is a portfolio company of The Trendlines Group and has been commercially farming grasshoppers for human consumption since 2014. This will be its first product release. Back in 2018, the company stated that it had already received $5 million in requests for orders of its grasshopper protein from companies like Ikea and Pepsico. Almost exactly two years later it seems like it’s finally prepared to start fulfilling said orders.

Hargol is far from the only company out there in the bug biz. Aspire makes B2B insect protein and acquired consumer-facing cricket bar brand Exo in 2018. Entomo Farms makes roasted crickets and cricket powder, and Orchestra Provisions is trying to entice consumers to eat insects by turning them into spice mixes.

There’s no question that we should be eating bugs — they’re high in protein and amino acids, incredibly sustainable, and easy to produce. But what is unsure is whether or not we’ll ever want to eat bugs. Western consumers may never get over the “ick” factor around eating creepy crawlies, regardless of how high in protein or easy on the environment they are.

Hargol has an advantage in that its grasshoppers are blended up into a powder, so they’re unrecognizable as bugs and can be easily added into other foods, like smoothies or cookies. Still, I’m not sure how ready Western consumers will be to “hop” up and buy a bag of grasshopper powder.

On the flip side, the coronavirus pandemic is making us all take a long, hard look at our food systems and security. Insects have the advantage of being incredibly easy to produce with limited natural resources and space, so maybe COVID-19 will actually help nudge consumers to open their minds to eating bugs.

Yes Health Raises $6M for Personalized Weight Loss and Nutrition Platform

We all know that sticking to diets is really hard work — especially when you’re stuck at home and the snack cabinet is never far from reach.

Yes Health is a digital health platform meant to help people reach their weight loss or diabetes prevention and management goals. Today, the startup announced that it had netted $6 million in Series A funding led by Khosla Ventures (hat tip to Techcrunch).

Yes Health’s mobile platform is meant to help people do one of two things: lose weight, or prevent diabetes. New users select one pathway and answer a short questionnaire about what sort of coaching you prefer (cheerleader/straightforward), your top goals, and the biggest challenges you struggle with to reach those goals. The system then creates an individualized health plan and schedule which outlines when you should eat meals, exercise, and sleep, and tracks your progress via photos and a daily weigh in.

Yes Health costs $49/month for the one year diabetes program (which comes with a Fitbit and digital scale), or $69 for coaching only. The four-month weight loss program costs $49/month (and includes a Fitbit). Yes Health sells both directly to consumers and is included in some employee health plans.

The real value add of the app seems to be the ease with which the personalized coaching is woven into the system. Users can take a picture of their meals, which Yes Health shares with nutritionists for assessment — no need to manually enter every ingredient in their salad or soup. Users also get access to personalized coaching for their workouts, including feedback when they complete certain exercises.

Yes Health isn’t the only app out there to offer nutrition coaching via photo. Bite.ai is a food journal that automatically breaks down the nutrition info of your meals based on photos, and in France, Foodvisor does much of the same thing. But neither service offers the same level of exercise recommendations and coaching that Yes Health does.

True, the messages all come from computers, not actual humans, so the interaction isn’t as powerful as it would be with an in-person coach. But an in-person coach is going to cost a lot more than $69 per month — plus, we’re not allowed to see people in person anymore.

For that reason, I think COVID-19 will present some appealing growth opportunities for online healthy lifestyle services like Yes Health. Since we can’t go to gyms or restaurants, we have to create our own exercise and dining plans. Tools like Yes Health could help folks to create a structured plan for nutrition and exercise to stay on course during social distancing. And that’s especially critical at a time when health is on the top of mind for all of us.

High Tech Plant-based Meat Startup Rebellyous Foods Raises $6M Series A, Accelerates Retail Launch

Rebellyous Foods, the startup developing next-gen technology to accelerate the plant-based meat industry, announced today that it had raised a $6 million Series A round. The funding was co-led by Clear Current Capital, Fifty Years, and Liquid 2 Ventures, with participation from Agronomics and Vulcan Capital (the investment arm of Paul Allen’s Vulcan Inc). This brings the Seattle-based startup’s total funding to $8.1 million.

Founded in 2017, Rebellyous Foods, formerly Seattle Food Tech, has always had a grand vision of reinventing plant-based meat manufacturing to make it more efficient and cost-effective. But it also has its own brand of alt-meat: chicken. The startup sells its plant-based chicken nuggets B2B to large-scale foodservice operations, like hospitals and cafeterias, in the Seattle area.

With its new funding, Rebellyous will speed up its specialized equipment R&D and expand product development to broaden its plant-based portfolio to include other products, like chicken tenders.

Rebellyous is announcing funding at a time when all anyone can think, talk, or write about is the coronavirus pandemic. Their press release is no exception; in it, Rebellyous CEO and founder Christie Lagally writes:

“Bird flu, swine flu, and now COVID-19 demonstrate that keeping large numbers of animals in close contact with one another presents a tremendous risk for global health… to transition away from our heavy dependence on meat, it’s critical that we make plant-based meat affordable and widely available through innovative production technology.”

There’s some evidence that COVID-19 is a zoonotic disease, meaning it originated in animals and spread to humans. While it’s not proven that switching to a vegan diet would prevent future outbreaks of this kind, that’s certainly being argued by companies and organizations trying to push adoption of meat alternatives.

In fact, retail sales of plant-based meats are on the rise right now. But when it comes to foodservice — Rebellyous’ target market — things are much more stagnant. To expand its revenue sources the company will be expanding into retail, and soon. “Rebellyous will be pivoting to selling direct to consumers (CPG), and we expect to announce a soft launch in just a few weeks,” Lagally told the Spoon. “We had always intended to move into CPG, but the pandemic shut down allowed us to realize that goal earlier than expected.” 

It looks like Rebellyous isn’t going to keep all of its eggs in the foodservice basket.