The power of a strong Why— a year of investing in high-impact foodtech
This is my son Allan, practicing how to eat. As most parents, I love him to death and he is the sun around which my universe revolves. Trellis Road was born out of mine and my co-founder Erik’s shared dedication to have a positive impact on our kids’ future.
A year ago, we wrote about why we decided to start investing in high-impact foodtech (here and here), and now when reflecting back on this past year it’s clear to me that the power of acting with a strong Why can’t be overstated.
The existing food system is largely shaped by Big Food, having met a growing global calorie demand by prioritizing quantity over quality for many decades. This approach has helped push down food prices by 40% since 1960, largely by adopting “whatever it takes” practices such as usage of synthetic fertilizers and pesticides, deforestation to make space for crops and animal feed and industrialization of mega farms. “Thanks to” these and other practices, the world’s 10 largest food companies now have a combined turnover of >$500B. However, their financial success has come with a very high price: animal welfare, human health and a suffering planet.
Food and agriculture is responsible for 25% of human-produced GHG emissions — expected to reach 50% by 2050. Our existing food system is built on cruel animal practices; over 400 million land animals and 3 000 million fish are killed for food, every day. Our food system is causing deforestation, leaching soils and diminished biodiversity; as 38% of habitable land is used for livestock, 11% for plant-based foods. 22% of adult deaths globally are caused by diets. And while 39% of adults worldwide are overweight, almost 700 million people are still undernourished.
I’ve been pretty climate dystopic for many years, saddened by envisioning a future where nature, animals and humans have to pay the bills of our unsustainable lifestyles. The magnitude of these challenges have often time left me feeling paralyzed, but I’ve come to realize that doing something is far better than doing nothing. Because even if your actions as an individual seem like the tiniest drop in the ocean they might be part of something much more powerful; a wave of hundreds, maybe thousands, of people using their time, energy and capital to create a positive impact on important problems.
My key take away from this past year is just how evident it is that at this point in time, high-impact foodtech startup community is one of those waves. Many of the most intelligent, most ambitious and most extraordinary individuals and teams out there can be found trying to solve important problems in the food system, for roughly the same reasons that Erik & I decided to make it our focus. This year we’ve spoken to hundreds of founders, of which the vast majority have gotten into the area of high-impact foodtech driven by their own strong Why. Many of them are like me deeply concerned by climate change and the environmental aspects of our current food system, others are deeply emotionally driven by animal rights or human health concerns.
Out of all the teams we’ve had the opportunity to speak to this last year we’ve finalized investments in 10 of them with 2 more deals in the making. Those investments are spread geographically over 4 continents as well as across multiple areas within foodtech, but what they all have in common is the positive impact on the world they will have if they succeed. All of the founders we’ve invested in have in common that their deep sense of why reinforces strengths that all startup founders need: passion, grit and optimism about what can be done.
Some of the startups we’ve invested in are developing and applying technology to areas of the food system that have not yet been digitalized, such as biotech pollination company Olombria and a digital marketplace and SaaS company for local produce.
Others are deep-tech and bioscience startups fundamentally changing the way we produce food; including Bond Pet Foods using fermentation technology to produce chicken protein, as well as cultivated meat and seafood startups Mission Barns and Bluu Bioscience.
We’ve also invested in startups who are building brands that are making it easier and more attractive for consumers to shift away from animal protein sources, including New York based plant-based protein startup Blackbird and Berlin based Betterfish, currently developing the most delicious tuna replacement out there. We’ve also invested into alternative protein brands that are accelerating this consumer shift on some of the world’s largest markets; Hero Protein in China and The New Butchers in Brazil.
Another key takeaway from this past year is what a perfect storm there currently is for high-impact foodtech startups. Technical leaps have opened up a world of possibilities; there has been a democratization of advanced research and production abilities, especially in biotech. Internet has undercut Big Food as gatekeepers and made it easier to target end consumers, and the old saying “software is eating the world” is now finally true also in the world of foodtech.
We’ve also seen first hand this year that building startups with a strong sense of purpose and Why is an extremely strong multiplier of the ability to recruit top talent, and especially so with a new generation entering the work force; 41% of 18-25 year olds globally think global warming is the biggest global concern and purpose is a top career priority for millennials.
There is a growing awareness of the fact that by 2050 we need to produce 1.5x more food using only 0.5x the GHG emissions, whilst at the same time tackling declines in soil health, crop nutrition, arable land, as well as biodiversity and environmental constraints and tougher regulations. This has turned the light to both the financial and impact upside in the foodtech sector, which has led to global investments in foodtech growing 3.4x between 2016 and 2020, a trend also driven by recent exits, big funding rounds and an increasing interest from traditional tech VCs in the space.
This last year we’ve built a great foundation for Trellis Road; we’ve found our sweet spot and have built great momentum. We’re ready to double down on our focus; investing small tickets ($50k-$200k) alongside strong lead investors, and are committing 100% of our focus and dedication for the next decade to find and work with the most ambitious high-impact foodtech startups out there.
Lastly. What we do with Trellis Road is in the bigger scheme of things pretty insignificant, and there are definitely many others making much bigger and more important contributions than we do. But on an individual level, knowing that we’re at least doing something and that the intros we make, the founders we support, the knowledge we gain, and the effort we put in are all tiny steps in a meaningful direction is an amazing and powerful motivation as we continuing to build Trellis Road.
Should you want to get in touch, we’re at email@example.com and firstname.lastname@example.org.
Sources: Our World in Data, The Guardian, Our World in Data, Our World in Data, FAO, Our World in Data, FPT, IMF, Our World in Data, The Lancet, Our World in Data, FAO, FAO, Fishcount, Agfunder, Atomico, Manpower, IPCC, EAT-Lancet, Forbes, Gallup, Yale