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Daily news and analysis about the food tech revolution

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IndieBio Cofounder Ron Shigeta Launches Virtual Accelerator

Longtime food and biotech investor and entrepreneur Ron Shigeta is rolling out a new virtual accelerator called iAccelerate.tech.

Shigeta established himself as a food tech pioneer as a cofounder of one of the very first future food and ag accelerators in IndieBio, where he helped some of today’s biggest names in future food such as Geltor and Upside Foods (then Memphis Meats) get off the ground. Since that time, Shigeta helped launch plant-based pet food company Wild Earth and more recently has been acting as an independent investor and advisor to various biotech and food tech startups.

From Shigeta’s Linkedin post announcing the move:

It’s a big day! I’m rolling out my advisory work as a virtual accelerator and I’d like to invite my network and their friends to join us!

Building at IndieBio has created a $4B+ portfolio. in the past 2 years TurtleTree, Inner Cosmos, SolarBioTech, Orbillion Bio (YC W21) , BloodQ, Inc, Juicy Marbles, Finless Foods (and some who are not out in public yet) has taken things to a new level for me and the #BioTech Startup world.

With iAccelerate, Shigeta is essentially taking his consultancy and investing work and formalizing it.

“I worked to find what I thought would be a next-generation accelerator structure,” Shigeta told me over Linkedin. “It’s a very small operation – 5-10 companies a year with lots of attention to detail.”

According to Shigeta, his new accelerator will take in 1-2% in equity for each company, a significantly smaller share than a traditional accelerator like TechStars that typically takes roughly 5% of a company.

As part of the launch of iAccelerate, Shigeta is also launching an investor syndicate.

“My latest stage in the evolution is to offer some investments on AngelList,” said Shigeta. “The Syndicate just lets investors elect to take the deals they like and offers the terms that the VC sees.”

While Shigeta has made a name for himself helping biotech-focused startups get up and running, his new accelerator shows he will look beyond the future food space. One of the first companies in the accelerator is Bite Ninja, a startup from Memphis that helps staff quick service drive-thrus with remote workers via telepresence.

“I really like to work with companies who are are just wrestling with an outrageous idea and we work together sometimes for months just to get it together to present and show MVP,” said Shigeta.

PitchBook: More than $10B Invested in Grocery Startups This Year

We’ve been saying that investment in grocery startups is downright frothy this year, and now PitchBook has put a number to all this VC activity. CNBC reports that venture-backed grocery startups have raised $10 billion so far in 2021, according to PitchBook’s data, vaulting past the $7 billion raised in the sector last year.

Part of the reason for the big jump is the mega-rounds that some grocery startups around the world raised during the first half of this year:

And that doesn’t even count all the other, smaller fundraises that have happened for companies like Food Rocket and Fridge No More.

The pandemic certainly had a hand in driving all this frothiness. Lockdowns, social distancing and general fears around catching COVID-19 pushed record amounts of people into online grocery shopping in 2020. Additionally, there are a wave of startups like Gorillas, and Gopuff and Fridge No More that are creating an entirely new type of on-demand, speedy delivery model. These companies operate dark stores in neighborhoods with a small delivery radius, promising grocery delivery in as few as 10 minutes. This is a new concept for most shoppers, and the allure of tapping a few buttons on your phone and food arriving minutes later could upend the way we buy groceries.

CNBC adds that all of this massive funding is disproportionate to the opportunity in the online grocery category. As such, there could be a wave of consolidation coming soon. This is true whenever money floods a particular sector, and it is especially worth considering given the fluctuating state of the pandemic.

Questions around how much consumers will stick with online grocery shopping once the pandemic recedes remains unclear. Vaccines have helped abate the virus, but they are rolling out at different paces around the world, and viral variants threaten to bring resurgences in case numbers. Brick Meets Click reported that online grocery shopping dropped to $7 billion in sales this past May, down 16 percent year-over-year. But that $7 billion figure is still 3.5 times higher than pre-pandemic online grocery sales.

But none of what might happen can change what’s already been done. That $10 billion has been invested, now we’ll just see which companies can bring bring returns.

Finistere Ventures Launches New Agrifood Fund in New Zealand

Food tech-focused firm Finistere Ventures announced today the launch of its Finistere Aotearoa Fund done in partnership with New Zealand Growth Capital Partners. The $40 million NZD (~$28.1 million USD) fund will support early-stage companies developing technologies for agriculture, alternative protein, supply chain, and other areas of food tech.

Finistere is no stranger to food tech, having invested in the past in CropX, Memphis Meats, Plenty, and several other well-known innovators in the food world. The goal of the Aotearoa Fund, besides supporting more such innovation, is to invest in specifically New Zealand startups to get them the help they need to make an impact worldwide. 

“While more than $46B has been invested in agrifood tech over the last decade – a trend likely to increase with the growing focus on sustainability – New Zealand hasn’t had the connected capital players necessary to help our companies take full advantage of this trend,” said Dean Tilyard, founder and director of Sprout who will now lead the new fund. “Our innovation cluster here is as good as anything in the Netherlands or Israel, but has been less well known. That is changing.”

Finistere, of course, already has offices in New Zealand. The new fund’s operations will be based in Palmerston North at R&D incubation center The Factory, which Finistere already has a longstanding relationship with. The fund will focus on a number of areas within food tech, including crop protection technologies, nutrient management, alternative proteins, food delivery, and supply chain advances. 

The launch comes the same week another fund, PeakBridge FoodSparks, launched in Europe with a focus on early-stage agricultural and food tech startups in that region. Both funds underscore the recent growth of the food tech sector, which nabbed more than $4 billion in the fourth quarter of 2020, according to Pitchbook data.  

Finistere hasn’t yet said how many companies it is looking to invest in with the fund, but did note that over the next year, it plans to garner more investment from partners including Rabobank, RIV Capital, and Yamaha. 

Report: $8.37B Invested in Food Tech During First Three Quarters of 2020

Venture capital flowed into both ag tech and food tech investments during the first three quarters of this year, according to a new report out today from Finestere Ventures.

Created in collaboration with PitchBook, the report found that AgriFood tech startups raised a total of $11.6 billion as of the end of Q3 2020. AgTech investment totaled $3.07 billion during that time (up from $2.7 billion invested in all of 2019), and food tech investment totaled $8.37 billion through Q3 (up from $7 billion in all of 2019). Finestere said that the majority of capital invested in both sectors went to later stage deals, illustrating market maturation.

Like everything else in 2020, the COVID-19 pandemic was a big influence on where investments flowed. Finistere said in its report that indoor farming was a big beneficiary of funding as demand for fresh produce increased along with insecurities around food supply chains. On the food tech side, the pandemic spurred investment in startups in e-commerce delivery and meal kits.

Finestere’s analysis correlates with the more general back-of-the-envelope-style tracking we at The Spoon have been doing around food tech investment. Just between May and June we tracked more than $699 million in funding announcements from food and ag tech companies. More recently, we reported on nearly $1 billion in food tech funding just in the month of October.

“With more than $46B of venture capital flowing into ag and food advances over the past decade, AgriFood tech has become a focus of tremendous investor interest. As COVID shone a light on some of our food and agricultural production system fragilities that need strengthening, capital flowed in to support the trend to dine at home,” Arama Kukutai, co-founder and partner, Finistere Ventures said in the press announcement. “While substantial progress has been made, there is still a long way to go. The investment trend we are seeing is long overdue in a massive sector that has been under-invested, and there is a lot of room for further growth. Building a sustainable ag and food ecosystem is absolutely critical, and it will take a lot of time and more capital.”

S2G Ventures’ Managing Director on the 4 FoodTech Trends That Will Rise Post-COVID (Spoon Plus)

I wanted to (virtually) sit down with Krishnan to discuss S2G’s recent white paper entitled “The Future of Food in the Age of COVID-19.” It outlines four foodtech trends that S2G expects will grow in the coming months and years: digitalization, decentralized food systems, de-commoditization, and food as as medicine. Krishnan and I unpacked these four trends — and speculated about how investors will change their focus post-COVID — in our call.

The Deep Dive interview is available for subscribers to Spoon Plus. You can learn more about Spoon Plus here. 

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.”

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.

Big Idea Ventures Raising $250M Fund Targeting Later-Stage FoodTech Companies

Big Idea Ventures (BIV), the hybrid VC firm-slash-accelerator, first caught my attention last year when it launched the New Protein Fund, a $50 million fund targeting seed-stage companies in the alternative protein space, and made its first investment in cell-based seafood company Shiok Meats. At the same time, BIV announced a twice-yearly accelerator program for budding alt-protein startups with locations in New York City and Singapore.

Now the accelerator is seeking its second cohort — and BIV is preparing to launch its second fund. Called Generation Food, BIV’s newest fund will target later-stage companies, Series A and beyond. It will expand its focus to tackle sustainability across the food supply chain, not just in the alternative protein space. The target amount? 250 million dollars.

I hopped on a call with Tom Mastrobuoni, a Venture Partner at BIV and the former CFO of Tyson Ventures (which invested in the New Protein Fund), and Andrew Ive, the founder and Managing General Partner of BIV, earlier this week to learn more about Generation Food. Mastrobuoni said that this fund will take a step back to tackle some of the larger, underlying issues plaguing the food system. He named six target areas:

  • Alternative Protein. With the Generation Food fund, BIV will continue to invest in alt-protein. However, they’ll focus on companies that are enabling general growth within the sector instead of particular food brands.
  • Innovative Ingredient Options. Better-for-you ingredients for healthy products including salt and sugar replacements.
  • Breakthrough Manufacturing. Improved manufacturing processes for proteins, as well as more sustainable packaging and low-waste water solutions.
  • Food Safety Innovation. Technologies that are making food safer and last longer, e.g. hyperspectral imaging.
  • Traceability and Transparency. Supply chain enhancements — but not just blockchain, which Mastrobuoni pointed out can be cost-prohibitive.
  • Logistics Enhancement. Ways to get food from A to B more efficiently, without relying so much on old-school methods like trucks.

At the same time, BIV will continue to use its New Protein Fund to fuel the Accelerator program. Thus far BIV has invested in 12 seed-stage companies through its Accelerator Program — which is split between Singapore and New York — and are about to kick off another. Ive said that he plans to start raising for the second New Protein Fund when the current one’s capital is about 75 percent deployed — in two years or so. He also plans to add at least one more cohort location.

Generation Food is a big step up for BIV, both in terms of scope and size. Ive told me that they were inspired to start the fund after speaking with large corporates, many of whom are making significant commitments to shareholders and consumers about how they’ll reduce their environmental impact — be it through packaging, water usage, CO2 emissions, etc. “Large corporates want to make these changes,” Ive told me. “They just don’t necessarily have the technologies in place to deliver on them.”

That’s where BIV can come in. Instead of corporations having to re-engineer their businesses to meet these targets, they can integrate technology from mid-stage companies which will do it for them.

Considering the volatile economic climate right now, it might seem like an odd time to launch a venture fund. But for BIV, COVID-19 is actually proving the relevance of food technology more than ever. “The pandemic is shining a light on the cracks that have always been just under the surface of the food supply chain,” Mastrobuoni told me. With the Generation Food fund, BIV hopes to drive innovation into spaces that can enhance sustainability and make the supply chain more resilient, should something like the coronavirus strike again.

Indeed, one of the things to come out of the COVID-19 pandemic is a heightened awareness around our food — where it comes from, how safe it is, and how inconsistent our supply chain can be (just try to find flour at your grocery store and see what happens). If we want to ensure a more resilient supply chain — especially in case another catastrophe strikes — we have to make our food system more sustainable now.

That’s the kind of argument that could help BIV attract the full $250 million for Generation Food.

Swedish Plant-based Investment Fund Kale United Scores €350K

Plant-based holding company Kale United announced today that its latest funding round, which launched on the crowdfunding site FundedByMe, is fully subscribed and has raised €350,000 ($380,000). The holding group currently has over 100 public and private investors.

Based in Sweden, Kale United has invested in 30 startups making plant-based meat, dairy, and more. Its portfolio currently includes Hooray Foods (meatless bacon), Noquo Foods (vegan cheese), Ocean Hugger Foods (plant-based fish for sushi), and LiveKindly (vegan media platform). According to a press release on their site Kale United’s most successful investment thus far is Astrid Och Aporna, a range of plant-based meat sold in Swedish retailers. The fund will use its fresh capital to expand its portfolio with new early-stage plant-based companies.

$380,000 seems like a pretty modest sum when compared with other plant-based venture firms, like Big Idea Ventures or Agfunder, whose funds are up in the tens of millions. However, it’s intriguing to see that Kale United has turned to a crowdfunding site to raise its sum, meaning that regular folks like you or me could get in on the investment action. Other venture funds require people to be an established investor or pay high entry fees to participate.

This pairs well with the recent trend we’ve been seeing in equity crowdfunding, which is when companies let people buy a stake of the company itself. Kale United isn’t doing exactly the same thing — rather it’s opening its doors to allow people to participate in their fund, which the company will then allocate to startups — but it is democratizing the investment process in a similar way.

It might be an opportune time for people to invest more heavily in animal-free products, despite the circumstances (you know, the global pandemic). Coronavirus is disrupting almost every corner of the food world, but it’s actually spurring sales of plant-based foods, specifically milk and meat. If that trend continues more investment in the space there will be more opportunity for new startups — and for the funds backing them.

AgFunder: Meat Alternatives, Indoor Farming and Cloud Kitchens Score Top Investments in 2019

Global venture capital fund AgFunder today released its 2019 Agri-FoodTech Investing Report, which gives a birds-eye view of the investment landscape in agriculture and foodtech (also known as agri-foodtech) companies over the past year.

Overall, it was a pretty fortuitous year for startups in the space. According to AgFunder’s report, agri-foodtech companies raised a total of $19.8 billion last year. That’s a 4.8 percent drop in funding from 2018 (a blip which the report pins on the US-China trade war and Brexit), but the industry still experienced roughly 250 percent growth over the past five years.

A few areas in particular enjoyed some hefty investment last year: meat alternatives, robotic food delivery, indoor farming, and cloud kitchens. If you’re a regular Spoon visitor, that probably won’t surprise you; we’ve been reporting on the growth of these industries extensively over the past year (plant-based meat and cloud kitchens, in particular).

One foodtech area that AgFunder reports did not see an increase in investor interest, however, was meal delivery. Quite the opposite, actually. AgFunder notes that investment in consumer food delivery declined 56 percent year-over-year as the market became oversaturated. The growing controversy over third-party delivery could also have something to do with it.

Upstream + downstream agri-foodtech investments. [Photo: AgFunder]

As investment in agri-foodtech grows and diversifies, so too does the investor pool itself. AgFunder’s report notes “more generalist, big global players and corps,” are flocking to agtech and foodtech startups, including giants like SoftBank, Amazon, and Microsoft.

There’s also a geographical expansion. Led by record interest from U.K., funding in European agri-foodtech companies nearly doubled in 2019. Latin America also had what AgFunder dubbed a “breakout year,” raising $1.4 billion for the sector. Unsurprisingly California still led in the U.S. (thanks, Silicon Valley).

Of course, we have to take the report with a grain of salt. As a venture fund itself, AgFunder obviously has reason to make its chosen area look like a white-hot space. Nonetheless, I think it’s fair to say that agtech and foodtech are indeed entering the mainstream — and attracting due investor attention.

2019 saw “far out” technologies like cell-based meat and drone food delivery, become… well, not mainstream, but at least less far-fetched. As they continue to mature — and fight through regulatory red tape to actually hit the market — I’m betting that we will see investments in the agri-foodtech continue on their upward trajectory.

SKS 2019: Here’s What Investors are Looking For in Food Tech

Here at The Spoon we often write about funding news for new food tech companies: how much they’re raising and what they’ll do with the money. But what about the investors who are allocating these funds? How do they decide which ventures are worth investment?

We gathered four VCs to talk about just that at SKS 2019. In the panel, Tom Allison of ZX Ventures, Nate Williams of UNION Labs, and Brian Frank of FTW Ventures spoke with Brita Rosenheim of Better Food Ventures about the dynamics of investing in the food tech space.

If you’re curious about what investors are looking for in this area or are a startup hungry for funding, you should definitely watch the full video below. Here’s a quick overview to whet your appetite:

The food tech space has lots of opportunity
Rosenheim summed things up pretty well when she said, “We’re really at the infancy of the food tech sector in terms of potential.” Frank, who is a longtime SKS attendee, echoed this thought as he reflected on the growth within the conference itself. SKS was originally focused on consumer tech but now has expanded to cover tech from restaurants to supply chains to waste management in addition to the consumer sphere. Nonetheless, “it’s under-invested and under-managed,” he said. In short, there’s plenty of opportunity.

Big Food is getting involved, too
Allison, who’s the Head of Investment Strategy and M&A at ZX Ventures, part of AB InBev, spoke about how Big Food is trying to formulate its investment strategy to mimic the efficiency and agility of smaller independent companies. One takeaway? Look at untapped resources within the company (e.g., spent grain) and figure out how to capitalize on it. (Protein!)

Hardware is, well, hard
Williams, the Entrepreneur in Residence for Union, a new spinout from Kleiner Perkins, dropped some truth bombs about the difficulty of investing in hardware. “[It’s] extremely hard to execute well,” he said. “The be honest, lean startup [mentality] is bulls—t when it comes to hardtech investing.” Especially compared with the relative ease of scaling software.

Check out the full video below to hear more about what opportunities these investors are looking for — and their current favorite food tech product.

SKS 2019: Investing In Food Tech: Hardware, CPG & Future Food

GFI: Investment in Plant-Based Meat, Eggs, and Dairy Hits $16 Billion, No Sign of Slowing

Today the Good Food Institute (GFI), a nonprofit promoting alternatives to conventional animal agriculture products, released a report on the state of investment in plant- and cell-based meat and dairy companies. You can download the report and read it in full, but here’s the main takeaway: the alternative protein space is on a massive upward trend, with record amounts of capital invested and high rates of new companies and acquisitions.

While it’s important to be aware of the author here — GFI has a clear agenda to promote alternative protein products — the numbers (below) are convincing. And also, not all that surprising. In fact, it’s in line with what we’ve been reporting all year.

Data from the report shows that alternative protein investment began experiencing a real boom in the past 2.5 years. Of the $16 billion invested in plant-based meat, egg, and dairy companies over the past 10 years, GFI reports that $13 billion of that occurred in 2017 and 2018 alone. We can attribute that to a corresponding increase in consumer demand for plant-based food options, specifically dairy and meat, spurred by trendy startups making tasty-in-their-own-right products like Impossible Foods, Beyond Meat, and Oatly oat milk.

There has also been an uptick in acquisitions of plant-based companies: of the 19 acquisitions in the space since 2009, 10 happened in 2017-18. That number could certainly increase as Big Food companies decide to invest more heavily in alternative protein sources (Unilever purchasing The Vegetarian Butcher; Maple Leaf Foods buying Lightlife and Field Roast). Beyond’s over-performing IPO could also entice these big corporations to spend big bucks.

However, acquisition isn’t the only way to get a bigger piece of the plant-based pie, especially going forward. For example, Tyson decided to end its investment in Beyond Meat to focus on developing its own line of plant-based products. And with its aforementioned successful IPO, Beyond has proven that acquisition isn’t the only end game for alternative protein companies.

The reports also covered investment and growth in the cell-based meat space, though products in that space have yet to come to market so there’s less going on overall. GFI notes that a whopping 11 new cultured meat companies were founded in 2018, bringing the total number of companies to 27. Of course, none of those companies have actually made a public sale. But 2019 might be the year that JUST finally makes good on its promise and brings cell-based meat to market — keep your eyes on Asia.

The plant-based/cell-based investment space isn’t about to cool anytime soon. So far in 2019 Shiok Meats, the Singaporean startup developing cultured shrimp, has raised $4.6 million, Singapore is investing over $100 million in cell-based meat (and other food innovations), and plant-based dairy company Eclipse Foods also closed a seed round. Add in Beyond Meat’s wildly successful IPO and it’s no wonder investors are scrambling to throw money at the alternative protein space. And it’s only May.

You can download the full report here.

Psst — want to stay up to date on all the investment trends in the protein alternative space? You’ve gotta subscribe to our Future Food newsletter — we cover it all.