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Daily news and analysis about the food tech revolution

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The Week in Food Tech Funding: Double (Alt) Cheese Funding & Big Money for Misfits

Fall is upon us in the Pacific Northwest, and alongside autumn colors and windy weather is lots and lots of food tech venture capital. This week’s funding news includes not one but two alt-mozzarella startups, a monster round for ugly produce online retailer Misfits Market, and three pieces of food robot funding news.

On to it:

Plant-Based Food

Sophie’s Kitchen – $5.6 Million: Sophie’s Kitchen has raised $5.6 million to fund the growth of its plant-based seafood lineup of products. The company, founded in 2010, offers a line of alt-seafood products, including crab cakes, shrimp, salmon, and tuna. Billy Goat Brands led the round, a Canadian venture fund focused on sustainability. Sophie’s Kitchen products can currently be found at Walmart, Sprouts, and Wegmans. The funding continues the momentum for the plant-based seafood category, which saw $116 million in funding in the first half of 2021 (compared to $26 million for the whole of 2020).

Growthwell – $22 Million: Singapore-based plant-based seafood and chicken maker Growthwell has raised a $22 million Series A led by Creadev. The company, which raised $8 million last year, “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).” They also sell a chickpea protein powder called ChickP for use in meat and dairy alternatives.

NUMU Food Group: Plant-based cheese startup NUMU has raised early in September. The amount of the funding was undisclosed. The company makes plant-based mozzarella from potato starch, soybeans, and coconut oil. Started a former DJ named Gunars Elmuts, NUMU sells its cheese to food service providers in shreds and blocks.

Precision Fermentation

Formo – $50 Million: Berlin-based Formo announced it had raised $50 million in Series A funding. The investment in the maker of animal-free cheese was led by EQT Ventures, with Elevat3 Capital and Lowercarbon Capital. Formo uses a precision fermentation process to make animal-free dairy cheese with animal identical proteins. The company plans to use the funding to “With the resulting increase in R&D capacity, Formo intends to expand its product portfolio to represent a wide variety of European dairy specialties such as mozzarella and ricotta, with techniques designed in collaboration with artisan cheesemakers.“

Food Robots

Pudu Robotics – $78 Million: China-based Pudu Robotics announced this week it had raised a $78 million C2 found of financing, matching the same dollar amount for its May C1 funding round. In total, the company has raised $156 million in Series C financing. The company makes a few different types of bots, including a front-of-house bot called the Bellabot, a cleaning bot, and two models of delivery bots.

Keenon Robotics – $200 Million: Another China-based robotics startup Keenon Robotics has raised an impressive round with its $200 million Series D. Its round was led by Softbank. Like Pudu Robotics, Keenon also makes food delivery and front-of-house food service bots and robots for hospitals.

Daxbot – $211 Thousand Crowdfunding: This week, Daxbot, a maker of sidewalk food delivery robots, launched its equity crowdfunding raise. Like many food robot startups, Daxbot is using StartEngine for its raise, and the company has already (as of this writing) raised $211 thousand from 136 investors. Today the company’s robots are being used for food delivery in Philomath, Oregon.

Online Grocery

Misfits Market – $225M Series C-1: Online grocer Misfits Market announced it had raised almost a quarter billion in new funding via a Series C-1 round. It’s a quick turnaround for more capital for the sustainability-focused online grocer that works with farmers and food producers to save ugly produce and food that otherwise would go into the compost bin; the company raised a $200 million Series C in April. Misfits Market joins fellow ugly food retailer Imperfect Foods as one of the companies that have tapped investor interest in the food waste space.

Smart Vending

Foodles – €31 million: Smart corporate food vending/catering startup Foodles has raised a €31 million Series B round from InfraVia Growth and Bpifrance via its Large Venture fund, and follow on rounds from existing investors, Creadev, DN Capital, and Adelie. The French company offers connected fridges, which it calls canteens that it supplies with food. According to the company, each fridge can provide food to up to 59 employees. The company hopes to disrupt a European contract catering market worth 240 billion euros.

Food Supply Chain Software

Grubmarket – $120 Million: Grubmarket, a provider of software and services to enable food producers, has raised a $120 million Series E round. The company’s software enables food producers and distributors to manage inventory, pricing, customer relations, and other company-related operations. The company’s announced hinted in the announcement that they will likely expand from just software into robotics in the future: “GrubMarket will likely also start to explore connected hardware to help those customers, too: robotics for picking and moving items” related to those activities managed by its supply chain oriented software.

Restaurant Tech

SpotOn – $300 Million: Payments software startup SpotOn announced this week it has raised a $300 million Series E to help finance the acquisition of Appetize, a mobile and digital payments startup focused on sports and entertainment venues, amusement parks, and zoos. Mega-VC Andreessen Horowitz led the deal (as they did SpotOn’s last round). A16z’s eagerness to inject more capital into SpotOn probably has a lot to do with the company’s tripling of revenue over the past 18 months. SpotOn, which has traditionally focused on SMBs (the segment of the restaurant space that has been the most aggressive in modernizing its tech stack during the pandemic), will now be able to sell into the enterprise market with the newly acquired Appetize.

GrubMarket Raises $90M to Make Its Food Delivery Service Available Nationwide

Virtual food marketplace GrubMarket announced today it has raised $90 million in an oversubscribed Series D round, up from $60 million when the round was first announced in October 2020. Participants include “funds and accounts” managed by BlackRock, ACE & Company, Celtic House Venture Partners, Sixty Degree Capital, The Strand Partners, Reimagined Ventures, Trinity Capital Investment, Madison Bay Capital Partners, Marubeni Ventures, GGV and others.

GrubMarket connects consumers with farmers via an extensive online marketplace where customers can shop for grocery items and some household goods. GrubMarket also has a B2B component through which it sells wholesale goods to grocery retailers, restaurants, corporate offices, and other business settings. The company counts Whole Foods, Kroger, Hello Fresh, Blue Apron, and many other companies among its customers.

Meanwhile, its WholesaleWare platform, which is a software platform food companies can use to manage their businesses. That includes anything from inventory and financial management to HR tasks and driver routing.

Mike Xu, GrubMarket’s CEO, said in a statement that the Series D round was originally intended to be no more than $30 million, and that the company has made “efforts to keep this round $100 million.” He said the new capital will allow the company to invest more in talent, technology, and acquisitions in the future. The company also plans to “expand to most regions of the country” over the next 12 months. In October of 2020, Xu said his company plans to go public, but did not give an exact timeframe for an IPO.   

Online grocery as a category is expected to account for 21.5 percent of all grocery sales by 2025, and companies currently offer all manner of takes on the concept. Right now that includes big-box retailers like Walmart, those like Rosie that are focused on independent grocers, and those like Imperfect Foods, which cater to specific niches of the buying public. GrubMarket’s “farm-to-pantry” approach certainly serves a demand, since buying direct from farms has increased among consumers.

But Grubmarket’s focus more and more appears to be on reinventing the supply chain and doing away with some of the inefficiencies there, hence the WholesaleWare platform and the growing B2B customer base. Expect that portion of the business to grow substantially from the new infusion of capital. 

Virtual Farmer’s Market Grubmarket Raises $60M

Grubmarket, a kind of virtual farmer’s market, announced today it has raised a $60 million Series D round, according to TechCrunch. The round included participation from BlackRock, Reimagined Ventures, Trinity Capital Investment, Celtic House Venture Partners, Marubeni Ventures, Sixty Degree Capital, and Mojo Partners. It also included participation from existing investors GGV Capital, WI Harper Group, Digital Garage, CentreGold Capital, and Scrum Ventures. It brings Grubmarket’s total funding to roughly $180 million.

Grubmarket founder and CEO Mike Xu also told TC that his company, which is profitable, plans to go public but did not give an exact time for an IPO.

Grubmarket runs a virtual farmer’s market, sourcing food directly from farmers then selling it online to businesses and  individual consumers. Customers can choose from a range of food items from local farms, fisheries, and even some restaurants and meal kit companies. Just as they would on other food delivery marketplaces, customers order their items via the Grubmarket app or website and can either pick them up or have them delivered for a small fee.

The company also operates the WholesaleWare platform, an all-in-one platform for food businesses to manage everything from their inventory and customer relationships to their drivers’ routes and payroll reports. Xu told TC that since the COVID-19 pandemic, sales of WholesaleWare “have seen more than 800% growth over last year.”

That growth shouldn’t surprise too much, as online grocery sales continue trending up in response to the pandemic’s effect on in-store grocery shopping habits. Additionally, we’ve seen an uptick in e-commerce platforms connecting consumers directly to farmers. Chipotle, for example, launched a direct-to-consumer virtual farmer’s market in June, and there are plenty of smaller, regional players, like Good Eggs in San Francisco and Farmdrop in the U.K.

For now, Grubmarket is available to customers in parts of the San Francisco Bay Area as well as Seattle, Michigan, Texas, Boston, and New York, among other places.

Food Tech News: Grubmarket Acquires Boston Organics, Surplus Food App Karma Pivots to Delivery

Here are some things that have been making us feel good lately: pancakes on weekdays, video calls with family, and foodtech news.

We can’t help you with the first two, but we’ve got the latest lineup of foodtech-y stories ready to go. This week we rounded up stories about grocery e-commerce acquisitions, food waste service pivots, and curbside grocery pickup.

Grubmarket acquires Boston Organics
Grocery delivery service Grubmarket announced its acquisition of Boston Organics, an online farm-to-table delivery service, earlier this week. Boston Organics is the first east coast foothold for Grubmarket, which is based in San Francisco. According to a press release this acquisition is part of Grubmarket’s plans to expand nationwide. Over the past year alone, Grubmarket has acquired other artisanal grocery delivery services Doorganics and Eating with the Seasons.

Weis Market and Hannaford restart curbside grocery pickup
East coast grocery chains Weis Markets and Hannaford have restarted their curbside pickup services (via GroceryDive). Both retailers hit pause on curbside pickup in March as COVID-19 started spreading rapidly, but are resuming the service to cater to customers who want to avoid crowds in grocery stores. To minimize contact, cstomers are asked to remain in their vehicles during the pickup and store employees will not accept cash or paper coupons. Both grocers have stated that some items might not be available due to high demand.

Photo: Karma.

Surplus food resale platform Karma pivots to delivery + food boxes
Before COVID-19, Sweden-based startup Karma’s platform partnered with restaurants to sell their surplus food for pickup at a discount. Now, with many foodservice establishments struggling or closing down altogether, Verdict reports that Karma has pivoted to delivery. The service provides its own drivers to deliver cooked restaurant meals, priced at half off, to customers who place an order on the app. Deliveries are available on weekdays up until 7pm, within a 3km radius of the restaurant. Karma is also launching Karma Box, a fruit and vegetable box sourced from their foodservice partners.

Farm-to-Table Delivery Service GrubMarket Raises $25M in New Funding

GrubMarket, a kind of on-demand farmer’s market that will deliver goods right to your door, announced it has raised $25 million in an oversubscribed C1 round (hat tip: TechCrunch). The round — originally meant to be $15 million — was led by WI Harper Group and Digital Garage, with participation from Evolv Ventures, Arancia International Inc., University Growth Fund, and CentreGold Capital. Existing investors also participated: ACE & Company, GGV Capital, Fusion Fund, Bascom Ventures. This latest round brings GrubMarket’s total funding to $89.1 million.

The company sources food directly from farmers then sells it online to individual consumers, businesses, and as wholesale to other businesses. Right now, the company counts WeWork and Whole Foods among its clients.

To use GrubMarket, one need only sign up for an account, fill a shopping cart, and pick a delivery date. You can also opt to pick your order up at a farmer’s market or in some cases directly from the seller. There’s no subscription required to use the site, which offers free delivery on orders over $39.99 and a $5.99 fee for smaller orders.

It’s not a bad deal for sellers, either, who can set up a virtual storefront in minutes on the GrubMarket site and get access to a potentially larger audience through GrubMarket’s customer base.

But as far as that customer base goes, GrubMarket will have to work hard to compete, as it has a growing amount of company in the farm-to-table-delivery space. Farmbox Direct ships its organic produce nationwide. Good Eggs raised a $50 million Series C round in May of 2018, and in Europe, and in the UK, Farmdrop closed a £10 million round to deliver its predominately organic and local goods to consumers.

GrubMarket, who is inching towards an IPO, told TechCrunch it plans to use the $25 million funding for new technology and more acquisitions. It’s done a couple of the latter, including Southern California’s Chasin Foods in January and FarmBox SF in 2016.

For now, the San Francisco-based company only serves counties in the Bay Area: Santa Clara County, San Mateo County, Alameda County, San Francisco County, Contra Costa, and Marin County.