FoodTech Startups News: April #1
Stay up to date with what’s cooking in the food startups world!
Welcome to ShakeUp Factory’s News Digest!
Here are the latest impacts startups had on the food world:
Pygmalion’s Kitchen 🥣
CRISPR’d Food, Coming Soon to a Supermarket near You
For years now, the US Department of Agriculture has been flirting with the latest and greatest DNA manipulation technologies. Since 2016, it has given free passes to at least a dozen gene-edited crops, ruling that they fall outside its regulatory purview. But on Wednesday, March 28, the agency made its relationship status official; effective immediately, certain gene-edited plants can be designed, cultivated, and sold free from regulation. “With this approach, USDA seeks to allow innovation when there is no risk present,” US Secretary of Agriculture Sonny Perdue said in a statement.
Memphis Meats to Bring Clean Duck and Chicken Meat to Stores by 2021
Memphis Meats, a clean meat company, just announced its ambitious goal of launching cruelty-free poultry by 2021. The company hopes this innovation will alleviate the animal suffering and environmental burden that comes with raising chickens and ducks for food.
Memphis Meats’ products are unlike any vegan meat currently on the market because it is real meat. It is not made from vital wheat gluten or vegetables. This clean meat is grown via cellular agriculture — from a sample of animal cells that eventually mature into real animal muscle. No animals are harmed to obtain this sample. According to the company, this scientific method of creating real meat produces ninety-percent fewer greenhouse emissions than raising live animals. There is no need to grow crops to feed billions of animals, it severely cuts down on transportation, it eliminates animal suffering, and it avoids adding hormones into consumer’s food.
Impossible Foods Raises $114 M
Global investors seem to have no beef with the idea of plant-based meat, as food tech startup Impossible Foods announced yesterday evening that it raised $114 million in convertible note financing.
The new cash brings the total to nearly $400 million in financing behind the plant-based, “bleeds like meat” brand, approximately $214 million of which was raised in the past 18 months. The company’s newest investors include Temasek, an investment company headquartered in Singapore, and Sailing Capital, a Shanghai- and Hong Kong-based global private equity firm.
Open Philanthropy Project, Temasek, Bill Gates and Horizon Ventures are repeat investors, and early investors include Google Ventures, UBS and Viking Global Investors.
Wild Type raises $3.5M to reinvent meat for the 21st century
Food security is one of the grand problems facing the planet this century. The UN has estimated that food supplies need to increase by 50 percent to cover the population growth expected over the coming decades, while climate change is expected to cut crop yields by a quarter. Nearly a billion people today lack sufficient food.
Those are raw statistics, but Justin Kolbeck saw them viscerally personified every day as a U.S. diplomat in Afghanistan, where food security is a perennial concern. “…Things were so bad that people were smuggling meat over the Pakistan border,” he said, despite the incredible danger along that heavily guarded dividing line. Kolbeck eventually returned to the U.S., where he met Arye Elfenbein, who was studying for an MD/PhD in cardiology.
Heavy Lies the Crown 👑
Former Uber CEO Lands in the Cloud Kitchen Market
Former Uber CEO Travis Kalanick is playing a new game modeled after those HGTV shows, where teams of fortune hunters turn distressed properties into quick-sell gems. In the case of the newly formed City Storage Systems, the narrative differs in that these down-and-out chunks of real estates are empty or neglected strip malls and parking lots, and the endgame is to create an assembly line of cloud kitchens.
Rod of Asclepius 💊
82Labs raises $8M to create a better hangover recovery drink
While taking some time off to travel before his next gig, Sisun Lee spent a lot of time in Korea — where he found himself drinking alcohol pretty much every night and then getting rolling the next morning, regardless of hangover status.
He also found that there were popular local herbal hangover drinks that everyone kept raving about. So he brought a bunch of them back to the U.S., handed them out to friends, and generally got interested in the drink as a thought experiment. After reaching out to scientists in academia about the herbal drinks and finding no one had really commercialized it into a product in the U.S. — and that there might actually be something behind the idea — he decided to start 82Labs and roll out the Morning Recovery drink. The startup has also raised $8 million in new financing from Altos Ventures, Slow Ventures, Strong Ventures and Thunder Road Capital.
Dining with Lucullus 🍽️
We Suck at Reservations
“Five percent of all diners are total dicks,” says Nick Kokonas, a derivatives trader turned restaurateur who operates several acclaimed bars and restaurants like Alinea in Chicago and the Aviary in New York. Kokonas also founded Tock, the reservation platform known for its prepay model: Restaurant owners can require diners to put down a deposit, or pay for the whole meal up front, to secure a table. Kokonas built Tock, in part, to battle the dicks. By forcing people to pay, Kokonas hopes to eliminate the customers who constantly reshuffle their reservations, simply flake without notice, or who show up with extra, unexpected guests. “I’m like, okay, you’re exactly the kind of person I don’t want to go to my restaurants,” Kokonas says.
Cornucopia 🍱
NJ Whole Foods features an in-store mushroom farm
Whole Foods managers say the mushroom display is a draw for shoppers who know they will get the freshest possible product from the in-store mini farm. And because there’s no need to transport the mushrooms, the retailer can offer them at a lower price point and still cover costs.
This unique installation is both educational and practical and also reflects Whole Foods’ position as a mission-driven company trying to set standards of excellence for food retailers. The project embraces three of the company’s six core values: selling the highest quality natural and organic foods, satisfying and delighting customers, and caring about the community and environment. And because Whole Foods shoppers are already hungry for transparency and locally grown food, this seems like a savvy and low-risk plan for the retailer to play up its strengths in a visually compelling way.
Startup Using Deep Learning to Fight Food Waste Raises $2m Seed Round
AgShift, a California-based food inspection technology startup using deep learning to assess the quality of produce has raised a $2 million seed round led by Exfinity Ventures, an Indian VC focused on frontier technologies.
AgShift applies deep learning to the inspection of fresh produce through a mobile app. At every point in the supply chain from farm to wholesaler, to distributer, to packer or processor, to retailer, fresh produce is inspected for freshness, damage, size, and color to fit within the specifications the industry has set as well as the USDA’s grading system.
Beating Pheidippides 🏃
Deliveroo Plans to Make Its Own Food and Replace Chefs and Riders With Robots
Deliveroo has laid out a radical plan to overhaul its business model with automation and making its own food in a 20 slide presentation to investors, obtained by Eater. The standout objectives for the delivery giant in the presentation are:
- Create its own food offerings, personalised for customers
- Half the cost of food for customers
- Automate delivery
- Automate food production
- Double its profit margins
The food delivery company raised $385 million in its most recent funding round, taking the total it raised to $860 million and valuing the six year old startup to over $2 billion.
Blue Apron-Airbnb partnership offers tastes from around the world, but is that enough?
Will two prominent online consumer services coming together result in a promotional program that brings more visibility, sales and investor confidence? Blue Apron and Airbnb hope so.
Combining the brand equity of meal kit maker Blue Apron and travel juggernaut Airbnb is a way to bolster Blue Apron’s customer base and stock price and get more visibility for Airbnb Experiences, while further enhancing the Airbnb name as it expands its offerings. Blue Apron could have offered recipes like this on its own, but hopes the synergy with Airbnb will add to sales. If the promotion works, future synergies could be in the future, like offering Blue Apron meal kits to people using the core Airbnb lodging service.
Instacart Adds $150 Million Two Months After Last Funding
Online grocery delivery operator Instacart Inc. is adding more money to a previous round of venture financing from February, bringing the total to $350 million to fund a battle with Amazon.com Inc.
The San Francisco-based company said on Thursday that it raised $150 million in the round led by Coatue Management, on top of the $200 million investment that came primarily from Coatue and Glade Brook Capital Partners first reported by Bloomberg in February. Instacart said it doesn’t plan to sell any more shares at the current price.
Alibaba Takes Control of Ele.me, at $9.5 Billion Value
Alibaba Group Holding Ltd. is buying full control of the startup Ele.me as it steps up efforts to expand in China’s fast-growing market for local delivery of food and other services.
The deal implies an enterprise valuation of $9.5 billion for Ele.me, Alibaba said in a statement Monday, without saying how much it’s paying. Alibaba and affiliate Ant Small and Micro Financial Services Group Co. already owned about 43 percent of the startup’s voting shares. Alibaba paid all cash in the deal and has acquired all the shares formerly held by Baidu Inc., according to a person familiar with the matter.
Sons of Ivaldi 🛠️
A Brooklyn-based startup that’s building cheaper robots to democratize biotech just closed a $10 million funding round
Opentrons, a Brooklyn-based startup that’s trying to replace lab work that scientists often have to do by hand with a $4,000 robot, just raised $10 million.
The seed funding round was led by Khosla Ventures, which was joined by the Y Combinator Continuity Fund, Lerer Hippeau Ventures, and former Pfizer CEO Jeff Kindler. The company got its start back in 2014 with a Kickstarter campaign, and went on to be a part of Y Combinator in 2016.
Opentrons develops robots that help scientists by automating the process of pipetting, which transports a certain amount of liquid from one place to another. It’s a necessary part of doing things like getting DNA samples ready for sequencing.
Forging Gleipnir 🔗
Food Traceability and Safety Software FoodLogiQ Raises $19.5m from Pontifax, Tyson
FoodLogiQ, a software platform aimed at mitigating food safety and traceability issues has raised a $19.5 million Series A round from a diverse group of investors.
The round was led by sustainability-focused investors Renewal Funds with participation from agrifood tech VC Pontifax AgTech, digital measuring hardware maker Testo, Inc., Tyson Ventures, the VC arm of global protein player Tyson Foods. Greenhouse Capital, and Nicola Wealth Management and also participated.
Return of Persephone 🌱
How China will target U.S. agriculture
Many of America’s most dominant agricultural commodities make China’s list of 106 products worth about $50 billion that are slated for retaliatory tariffs, including soybeans, wheat, corn, beef and orange juice.
China said it would impose a 25 percent tariff on $50 billion worth of American exports. The actions are designed to sting the U.S. agriculture industry — one of the few sectors where the U.S. runs an overall trade surplus.
What is the Prototypical Agtech Exit?
The headline-making agtech exits of 2017 generated cautious optimism among investors and stakeholders, but as industry thinking moves along, a new conversation is emerging around what the acquisitions of Blue River Technology by John Deere, Granular by Dupont (now Corteva) and even The Climate Corporation by Monsanto, mean for agtech startups moving forward.
At the closing investor discussion at the World Agri-Tech Innovation Summit in San Francisco on March 21, three agrifood investors concluded that though the exits of 2017 were good to see, they weren’t necessarily as replicable as many may hope.
Future Food Asia Award Founder Discusses Sources of Asian AgriFood Tech Innovation Ahead of 2018 Competition
The Future Food Asia Award (FFAA), Asia’s first agrifood tech startup up competition, will be presented in Singapore for the second year on May 23.
String Bio, from Bangalore India, took home $100k and top honors at the competition in 2017. The startup converts methane, a waste gas responsible for much of livestock production’s greenhouse gas emissions, into proteins that can be used in animal feed,
Agrifood tech investment to date in Asia has been a story of extremes, with most countries posting modest investment totals apart from the global contender across all categories of venture-backed investment, China. Part of Future Food Asia founder Isabelle Decitre’s mission is to stoke innovation outside of China, and also amplify the investment that is happening, but for various reasons, doesn’t make headlines.
That’s all for today, thanks for reading!
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