Y Combinator’s Good Food Startups (2016)
Y Combinator is a world-renowned startup accelerator and one of the most admired brands in Silicon Valley. Founded in 2005 by Paul Graham and now run by Sam Altman, YC ushers hundreds of the most promising startups through its prestigious program every year. The company’s semi-annual three-month boot camps are highly sought after by thousands of entrepreneurs hoping to become the next Airbnb, Dropbox, Instacart, or Reddit, each of whom cycled through YC’s doors.
Those lucky enough to be selected receive $120,000 in seed money, access to top level coaches and mentors, countless professional resources, and an on-ramp to crucial Silicon Valley connections. In exchange, the startups hand over 7% equity to YC. All startups enter the program with the same valuation: $1.7 million. But when they take the stage at Demo Day, after three months of intense incubating, the cohort’s mean valuation is $10 million.
Demo Day is the program’s capstone event where each company gets to show off its maturity through the program and pitch to an impressive roster of Silicon Valley investors and YC alums with the hope of finding investment and pivotal connections.
I scanned the 200-plus startups that pitched at YC’s 2016 Demo Days and highlight below 8 food sustainability startups with the potential to drive substantial change to our food system. These companies are tackling some of the biggest problems plaguing our society: food waste, hunger, food security, automation in food production, health and wellness, and agriculture’s role in international development.
Copia: Food waste reduction is a rapidly growing startup space. That increased attention and innovation is sorely needed when roughly a third of our food grown in the US is wasted. Enter Copia. The startup matches and delivers diverted food waste to homeless shelters, food banks, and communities in need. After completing delivery of surplus food for, say, a restaurant, Copia helps ensure that the restaurant receives tax credits for its food donations. The company then provides a report on the cost and waste savings, including recommendations for preventing future waste. The company takes 25% of the tax credit plus a volume-based pickup fee. So far, Copia has helped feed 700,000 people and facilitate $4.9 million in tax deductions and other savings. Copia plans to expand to other cities outside the Bay Area and to other products and services.
Iron Ox: Robots running greenhouses may be the future of agriculture, according to former YC startup Iron Ox. Labor costs in the agriculture sector sometimes make up one third of total crop production costs. Iron Ox believes its automated solution can cut those costs by as much as 10–20%. The company’s first robotic greenhouse launched in San Carlos, CA, making pesticide-free basil and lettuce for Bay Area customers. The greenhouse uses 1/10 the water consumed through conventional growing practices.
Kisan Network: Farmers in rural India often operate in an opaque market where sales are dependent on networks of middlemen. Without direct access to buyers, these farmers rarely know the going market rate for their produce. Kisan Network is bringing that process and marketplace online where it can cut the middlemen, provide pricing transparency, and become the central marketplace for India’s farm and agriculture products. On the Kisan platform, farmers can deal directly with buyers. Using smart phones, farmers upload photos and descriptions of their crops as well as an asking price. Kisan Network then connects them with potential buyers. After the harvest and sale, Kisan helps farmers sort, process and ship their produce to buyers. The company takes a small cut from every transaction, never to exceed 8%.
mRelief: This startup wants to simplify the process people go through to sign up for food stamps, a nutrition assistance program that benefits 44 million Americans. Unfortunately the process for assessing eligibility is arduous and arcane. mRelief believes many eligible Americans do not receive this necessary assistance because of those difficulties. In response, the company develops user-friendly survey tools to help customers validate eligibility for government services. They want to eliminate the wasted effort that happens when customers fill out endless forms only to find out they aren’t eligible. They also want to make it easy enough to use so that those who are eligible will sign up and receive much-needed benefits. mRelief estimates that its suite of solutions can save the government time and money and result in a 20% increase in total income for beneficiaries. In 2016, the startup connected over 100,000 families to social services, while the year prior it connected 5,000 families. It currently operates in all 42 states where eligibility requirements are publicly available.
Ohmygreen: You’re not really a cutting edge company these days unless you’ve nailed the office snack spread. Catering for office snacks is a huge market that not surprisingly trends toward healthier options. Ohmygreen, who already boasts clients like Lyft and Amazon, fashions itself as a logistics and wellness company. They optimize delivery networks to stock offices with healthy snacks. In addition to the snacks, the company provides clients budget and inventory tracking tools, kitchen equipment, and customization. The latter is enabled by a chat feedback loop whereby Ohmygreen can collect feedback from employees and make adjustments to customize the service to employee tastes. In the future, the company envisions offering a holistic model of wellness services, including yoga classes, meditation, and planning for health and athletic goals.
Raptor Maps: The business of agriculture is changing rapidly due largely to advances in big data and automation. Sensors are monitoring fields and collecting new data and insights into the health and productivity of crops. Raptor Maps is deploying similar technology to help farmers understand which acres of their farms are best producing crops. Using drones and tractor-mounted sensors, Raptor Maps can analyze and even A/B test every acre of a farm. The resulting data helps farmers understand which seeds, fertilizers, and pesticides work best so they can boost profits and optimize their fields. The startup already has early pilots underway with suppliers for McDonald’s and Costco.
TL Biolabs: This startup is helping farmers optimize operations and save costs by making more accurate predictions about the health of beef and dairy cattle. Other companies offer similar genomic testing that can predict future fertility and productivity of cattle, but not at TL Biolabs’ price point. The company offers farmers this predictive testing for $15. The resulting insights help farmers understand how susceptible their cattle are to disease and the amount of feed needed to keep them healthy. The latter data point leads to more efficient breeding techniques which save costs for farmers and reduce their overall environmental footprint.
WorldCover: Farmers in developing countries are more vulnerable to natural calamities. A changing climate coupled with a lack of financial and social safety support means unpredictability at best and financial ruin at worst. In the event of a drought, for instance, farmers not only lose their crops and income for that season but also lose the ability to cover education and health care costs for their families. The cycle of poverty tightens and worsens in these cases. WorldCover steps in to interrupt that vicious cycle with a peer-to-peer funded crop insurance solution. Farmers receive crop insurance and investors get diversified exposure to insurance products and an opportunity to catalyze social impact.
Stay tuned for a post on the food startups from the YC 2017 Winter Demo Day.
Originally published at www.thymefries.com on April 1, 2017.
