Say you’re a VC looking to invest in a company that makes strawberry-picking robots. There are three or four companies in the space, all vying for your capital to get off the ground.
How do you choose where to put your dollars?
That’s one of the questions that we tackled last week at ArticulATE, our inaugural food and automation summit. We closed out the day with a lively panel on the opportunities — and challenges — in the food robotics investment landscape. Our speakers were VCs from the foodtech, hard tech and IoT spaces: Brian Frank of FTW Ventures, Brita Rosenheim of Better Food Ventures, Rajat Bhageria of Prototype Capital, and Avian Ross of Root VC.
The Spoon’s Michael Wolf moderated the conversation on what these investors are looking for in a food automation startup pitch specifically — and where they see significant opportunities in the fast-growing market. (Yes, both Frank and Ross have invested in strawberry-picking robots — and Ross claims he made the right choice.)
It’s certainly an exciting time in the food robotics space: there are tons of entrepreneurs out there with lofty plans to build the next robotic sushi restaurant, the next automated food delivery bot, or the next burrito-rolling robot arm (which, apparently, really hard to do).
However, the panelists seemed to agree that food robotics is a trickier investment space than a lot of other tech areas. Sure, the basic building blocks of food robotics — AI, articulating arms, etc. — are pretty democratized. But Ross (who — fun fact — spent a former life building robots for the Food Network) said that “robotics feels special and different.” He pointed out that the food system is incredibly complex and that a whole host of players have to be involved to deliver even the most basic meal to the consumer. And that’s just logistics: getting a robotic system to reach parity with a basic human fast food experience in terms of taste or customer experience is really tricky.
Because there are so many complexities at play it can require more capital than some other tech investments. It can also take longer to bring food automation technology to market. Which isn’t a problem — unless, as Rosenheim pointed out, you’re working with investors who are looking for “the next shiny thing” and aren’t patient enough to be in it for the long haul.
Investors in food robotics have to be especially willing to take risks and play the long game. However, not all the VCs saw eye-to-eye on what it takes for a food automation startup to be successful. The panelists disagreed on whether or not startups need deep restaurant market knowledge to be successful, how high the capital investment has to be in food automation, and what sets one seemingly identical food robotics startup apart from another.
Check out the video below to see the whole conversation — it was a really fun one.
Look out for more ArticulATE 2019 videos rolling out on our YouTube channel over the next week!